Financing, tax rates, and accounting
I sell custom made musical instruments. I collect a deposit when the order is placed, and collect the remaining balance when it is completed and ready for delivery. Let's say the item is $10,000. I will collect a $2500 deposit initially and the remainder is due prior to delivery, a few months later. The deposit is not a "physical item" and no sales tax is collected on it. When I prepare an invoice prior to final delivery, the balance due is $10,000 minus the $2500 deposit = $7500, plus sales tax. I add the previously collected deposit as a "discount" as there doesn't seem to be anywhere else to add it. The Shopify invoice will only calculate sales tax on the $7500. Is there a way for it to calculate sales tax on the full $10,000 amount? For this example, let's say sales tax is 10%. The customer should be charged $1000 in sales tax, but Shopify will only add $750.
Another small complaint: on that invoice, since the previously collected deposit is listed as a "discount", the generated email invoice will say "You saved $2500!" which is not true.
Thanks in advance for any advice!!
Thanks so much for taking the time! I really appreciate your help. Here is what I don't understand, and maybe you can help me with this. I already have a "product" called "deposit" which is how I collect the initial deposit - in this hypothetical case $3000. It is fulfilled when the customer pays the deposit. If I create another "deposit" for 0$ and apply a $3000 payment to it, then I will have two $3000 payments in the system which will both be included in our gross sales and will affect our accounting and our income taxes. Maybe I don't completely understand your workaround here. Is there something that I am not understanding? Thanks again.
It seems that the person who offered advice, who I was replying to above, has removed their reply. They had recommended making a 0$ deposit product, adding it to the invoice, and marking a $3000 payment to it. Does anyone else have a possible solution? Thanks in advance.
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