35+ Sample Official Receipt Templates

Official Receipts: What Are They?

An official receipt has many names depending on who you ask. Some people call it a cash receipt or a payment receipt. But whatever this small piece of paper is called, it serves a single purpose. The main reason why a receipt is printed is to produce hard copies of financial transactions to be used by businesses for tax and accounting procedures. Furthermore, receipts are used as proof of income received throughout the year. Because of that, receipts are easily considered as official tax documents. While invoices are only used in accrual-based accounting, they are not used during tax season because invoices just indicate that a value is owed than being received.

The Turbo Tax suggested keeping the receipts of the following expenses if you want to lower taxable income and increase your potential for a tax refund: medical, childcare, unreimbursed work-related, self-employment, and other expenses.

Meanwhile, the tax crimes investigated in 2019 were more than 1700 while approximately 1800 in 2018 according to a report posted on the IRS website.

According to the Criminal Defense Lawyer, a conviction for tax evasion and other tax crimes have a fine of up to two hundred fifty-thousand US dollars ($250,000.00) for individuals and five hundred thousand dollars ($500,000.00) for corporations. While other tax fraud crimes have maximum penalties of one hundred thousand US dollars ($100,000.00) for individuals and two hundred fifty-thousand US dollars ($250,000.00) for corporations.

Why Official Receipts Are Important

Did you know that you can lower your taxable income and increase your potential for a tax refund? The practice to observe is by looking at the purchases made and the bills you pay each year. Surprisingly, some of these are actually tax deductibles. According to Turbo Tax, receipts of medical, childcare, unreimbursed work-related, self-employment, and other expenses are required if you apply for deductions on your personal income tax return. On the other hand, saving receipts still depends on your personal tax situation. Moreover, the benefits of the sales tax deduction are accrued through one or more large purchases for the tax year—like a car, boat, RV, or real estate property. These will lead to a greater amount of sales tax than the value of income tax withheld. Other than that, the list below enumerates more importance of official receipts.

1. Accounting Method

Accrual-based accounting and cash-based accounting are two different accounting methods used by businesses. Both methods accept receipts in the entire business operations. However, cash invoices are accepted only by accrual-based businesses. These businesses have account payable accounts and record cash invoice transactions in their general ledger. Since cash-based businesses do not have account payable accounts in their accounting book, they cannot record cash invoices.

2. Tax Recording 

Because the Internal Revenue Service (IRS) is specific regarding acceptable proof expenses and income from business operations, all persons subject to tax shall issue sales receipts and commercial invoices with the date of transaction, quantity, unit cost, and description of product or services. The official receipt is regarded by the IRS as adequate proof that an expense happened. Based on the tax evasion statistics published by IRS, 1,714 tax crimes were investigated in 2019 and 1,811 in the previous year.

3. Calculating Withholding Tax

What are withholding taxes? These are taxes that businesses have to withhold from their supplier from a payment. It is required to deduct 30% withholding tax if the source gross is not connected with a US trade or business. This leads to a legal obligation to file and remit that withholding tax to IRS using form W-4 as proof that the tax has been applied. Like value-added tax (VAT) (discussed below) every business should rely on its official receipts when computing the applicable withholding tax payable. Hence, a payment receipt should be issued or received for every transaction entered into by a business because taxes cannot be computed or remitted without it.

4. Calculating Value Added Tax (VAT)

Each service-oriented business relies on official receipts when calculating the level of VAT to be filed to the IRS. What is VAT? It is an indirect tax that applies to the purchase of most goods and services. The current rate of VAT in the US is 10%. Furthermore, the collected tax is called Output VAT while the VAT paid on purchasing goods and services is called Input VAT.

5. Requirement for Audit Season

Every year, audit season comes around. This is the period usually between January and April and the busiest time of the year for businesses. During audit season, business owners should validate all transactions and activities occurring throughout the fiscal year. Hence, they must prepare and submit various financial and tax documents to the government’s revenue regulating bodies like the IRS. The appointed auditor needs all the important business documents to perform the audit. This undertaking ensures that companies comply with their corporate and financial obligations.

Elements of an Official Receipt

Whether you are a startup or a business operating for many years, issuing receipts should be on top of your priority list. Non-compliance with this order can result in tax evasion or other tax crimes. The Criminal Defense lawyer said that the penalty for such crimes is between $250,000.00 for individuals and $500,000.00 for corporations. Other tax frauds can cost an individual $100,000.00 and a corporation $250,000.00. Hence, learning to create receipts is a crucial skill for having a business. Before starting to make your official receipt, make sure you know what it is consists of. The list below will tell you everything you need to know about elements of an official receipt.

Title or Label: Proper labeling of form is one means to organize your paper works. If you do not put a title on your receipt, you might exchange it with an invoice or a bill. To avoid that, label your receipt with “Official Receipt.” It should come with the receipt number and approval of the IRS. More so, labeling your official receipt is also a courtesy to the customers as it is easier to record.Business Details: The second element of a cash receipt is the business details. It is standard to include the basics like the registered business name, complete address, email address, and other contact information. When customers have inquiries about the transactions made with your business, they know how to reach you. Aside from that, these details show ownership of the document and it can be easily recognized as yours.Unit Production Cost (UPC): This element is the total cost of a production run, divided by the number of units produced. It is important for customers so that they know how the cost is accumulated. Businesses commonly manufacture the same products in batches that may include hundreds or thousands of units per batch. Thus, UPC is a crucial part of an official receipt.Quantity and Price of Each Product/Service: Indicating the quantity and price of each product or service are necessary when calculating the sub-total cost. If these elements are not included in the receipt, it will send an ambiguous message to your customers. They will be confused about how the total amount is accumulated. So, do not skip this to be transparent with your client and avoid beef with them as well as the IRS.Sub-total: The sub-total is the result of multiplying the quantity and the price of each product/service. It is separated by a column in the receipt. If there are several items purchased during the transaction, they must be listed in the receipt and multiplied by their corresponding unit price to find the total price later on. Rate of Sales Tax and the Amount of Tax: After calculating the total price, the next value to indicate in the receipt is the rate of sales tax and the amount of tax. Both are the applicable tax during the business transaction. Discounts are also included. Total Price: The element of an official receipt is the total price or the overall value of the purchase. This is obtained by deducting the applicable sales tax and discount rates from the sub-total. The result is the total price. To make this more noticeable, most total prices are written in bold characters at the bottom of the receipt.

How Do You Make an Official Receipt?

Making official receipts is not as challenging as you think. Receipt templates are available online. You can start by browsing through our website and discover a collection of different types of ready-made business templates. Additionally, editing tools and word processors are helpful for customizing the template’s suggested content. Before we tell you the tips in creating impressive receipts, make sure you started a plan to outline different parts of your receipts.

Tip 1: Select a Template

Stencils or templates are available on the internet. To download high-quality templates, look for a reliable source. Using a template will not require you to start from scratch in creating your receipt. Aside from that, it comes with editable suggested content so that you can align the elements to your needs. If you are still hesitant in using a template, think of the time you could have spent on other projects than spending so many hours making a single receipt.

Tip 2: Choose an Editing Tool

The best editing tool doubles the convenience of your chosen template. However, you just cannot pick a random word processor. To use an editing tool, make sure it is compatible with the stencil you downloaded. The way around this is by checking the template’s feature on the website. The applicable tools should be mentioned on the webpage. Choose a template that is suitable for the word processor you can easily access. Otherwise, looking for the right editing tool for your template will be another concern.

Tip 3: Make It Appealing

Even if an official receipt is a business document, it should not be excused from the designs. You can add borders and tables to neatly organize the content. It is also important to the receipt on brand. Thus, use logos or symbols that are easily recognizable as your belonging. It helps clients identify your business through representations. However, overdesigning the receipt can deficit the purpose it serves. So, find the balance and keep every content afloat.

Tip 4: Keep It Simple and Concise

In addition to the third tip, keep the official receipt simple. Make sure it looks professional by using simple font styles or use novelty fonts if you want to make a statement. Use your own judgment in designing the receipt. Moreover, use simple words to clearly send your message across. Avoid hard-to-understand words because it will confuse your customers, which is not a good thing when dealing with a contentious matter like this.

FAQs

What are the different types of receipts?

  • Purchase Invoices
  • Bank Statements
  • Bills of Lading and Commercial Letters
  • Expense Reports
  • Tax Assessments
  • Commercial Receipts

How long should a receipt be kept?

The IRS suggested keeping official receipts for at least three years or as long as necessary.

What other business records should I keep?

  • Invoices
  • Payroll
  • Journals
  • Ledgers
  • Previous Tax Returns
  • Employment Taxes
  • Assets and Business Property
  • Canceled Checks and Bank Statements
  • Credit Card Statement

Official receipts are not just proof of transaction. It is also necessary for tracking sales and declaring income tax. Doing this effectively means complying with the legal requirements that cover the financial aspects of your business. Moreover, issuing official receipts to your customers guarantees them proof of their purchase. If you are to create a receipt form, get your copy today on our website and experience the convenience a template can bring!