Author Topic: request: math help (percentages/taxes)  (Read 2113 times)

scrubbyfish

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request: math help (percentages/taxes)
« on: August 06, 2014, 05:44:06 PM »
If I do up an invoice to the government on behalf of our autism service provider, I will get back the $175 deposit I made!
But I don't know how to figure out the tax line the invoice must present.

An invoice from a different provider provides clues:

Total: $300.00
Service $285.72
Taxes $14.28

Total: $450.00
Service: $428.58
Taxes: $21.42

So...

Total: $160.00
Service ???
Taxes ???

Total: $480.00
Service ???
Taxes ???

My best guess goes like this:
14.28 divided by 300 = 0.0476
300 x .0476 = 14.28
Therefore, the equation is:
160 x .0476 = $7.16
480 x .0476 = $22.85

So...
Service $152.84
Taxes $7.16
Total $160.00

And
Service $457.15
Taxes $22.85
Total $480.00

Does that look right? (I am EXTREMELY proud of myself for giving this my best go!)
« Last Edit: August 06, 2014, 05:55:11 PM by scrubbyfish »

SoftwareGoddess

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Re: request: math help (percentages/taxes)
« Reply #1 on: August 06, 2014, 07:14:19 PM »
I think you are close enough! Working the numbers in a slightly different way:

  14.28/285.72 = .049979

  21.42/428.58 = .049979

which suggests that there is probably a 5% tax rate on the services provided. Does that sound right to you? If so, then the way I would approach the calculation is:

  Service + Taxes = 1.05 * Service, so
  480 = 1.05 * Service
  Service = 480/1.05 = 457.14
 
which is only .01 different than what you came up with. Well done!

scrubbyfish

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Re: request: math help (percentages/taxes)
« Reply #2 on: August 06, 2014, 07:22:14 PM »
Oh, delicious! Thank you, SoftwareGoddess! (I remember you helped me with my last math question, too!)

I didn't/don't know what the tax rate is, so if the math says it's 5% then so be it :)

In BC, we have had GST, HST, and PST and then each changes, or one gets eliminated, or some get combined, and then one changes again or is reinstated. The sample invoice provided by Autism Funding references all three, one in one area and the other two in another. This is why I didn't feel able to just look up the relevant tax rate, oy, and the sample invoice doesn't state it. Ack. There are several reasons some service providers refuse to provide services funded by this program; invoicing issues are one of them.

SoftwareGoddess

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Re: request: math help (percentages/taxes)
« Reply #3 on: August 06, 2014, 07:41:02 PM »
I have heard of your sales tax ups and downs from the other side of the country, but I hadn't really thought about how hard it must be to keep documentation and processes up to date with all the changes happening.

I took a quick look at this Wikipedia page:

https://en.wikipedia.org/wiki/Sales_taxes_in_British_Columbia

which claims that the current rates are 7% PST and 5% GST. I don't find it hard to believe that the services are subject to GST and not PST, especially since it supports my math. :)

tarheeldan

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Re: request: math help (percentages/taxes)
« Reply #4 on: August 06, 2014, 08:10:03 PM »
Total = Service + Taxes

Taxes = 4.76% of Total   . You will see that this is exactly true in both example invoices.

So, in your case:

Total: $160
Taxes = .0476*Total = $7.62
Service = Total-Taxes = $152.38

ETA (and rounding):

And yes, also

Total = $480 = $22.85 + $457.15

So..agreed!
« Last Edit: August 06, 2014, 08:13:01 PM by tarheeldan »

MrsPotts

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Re: request: math help (percentages/taxes)
« Reply #5 on: August 06, 2014, 08:16:26 PM »
Another thing you might try is to check with your local school district special ed soffice and see how they do this...I am sure they have contracted service providers.

scrubbyfish

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Re: request: math help (percentages/taxes)
« Reply #6 on: September 03, 2014, 10:17:39 PM »
Thanks again, everyone! The billing number FINALLY came in, so I got to finalize the invoice (which I'm doing up on behalf of the service provider, so that I can get my own deposit of $175 back). I really appreciate all the help I received here!