Apply Tax to an Invoice

You can apply taxes to your client invoices at the firm, matter, and time/expense levels.

At the Firm Level

Applying your tax rates at the firm level will help prevent mistakes.

To apply firm-level tax settings:

On the left navigation panel, click Setup.
From the Setup panel, click Firm Settings.
From the tabs atop the screen, click Financial.
Complete the fields under Tax Settings:

Default Matter Tax Status	Sets the default tax method for new matters, whether Taxable, Out of State, or Nontaxable. To make Time and Expense cards automatically taxable, choose Taxable.
Auto-calculate tax on payables/disbursements screens	Enable this to have the system calculate tax based on specified default tax rates. Review for accuracy, as some items can have different tax rates than the default rates.
Enable an additional tax rate	Enable this only if your jurisdiction requires two separate taxes, such as federal and state/province.
Sales Tax	Tax rate applied to matter cost (expense cards, overhead). Enter the applicable percentage for taxable matters as a numeric value only. For example, entering 5 = 5%.
Service Tax	Tax rate applied to your service fee (time cards). Enter the applicable percentage for taxable matters as a numeric value only. Entering 5 = 5%.
Tax ID	Enter the tax ID, if required.

In the upper right corner, click Save.

At the Matter Level

You can choose to handle taxable matters on a case-by-case basis.

To do so, you might only set a default tax rate for sales and/or service tax. Or, you might leave all firm level fields blank and handle tax at the matter level.

To manage tax settings at a matter level:

From the left navigation panel, click Matters.
On the Matters screen, double-click a matter to select it or click on the three dots (kebab menu) at the end of the row and from the drop-down, click Edit.
From the toolbar on the Matter’s Details section, click Settings.
From the tabs atop the Settings section, click Tax.
From the Tax Status drop-down, select the appropriate status.
If you applied tax rates at the firm level, those rates will apply. If you chose not to set a default tax rate at the firm level, or if this matter requires different rates than usual, then click Localized Tax Rate to apply special rates.
Click Save.
Time and expense entries for this matter will be taxable. When you create an invoice for this matter, tax amounts will automatically be calculated.

At the Time/Expense Level

If you choose not to apply tax settings at the firm or matter levels, you can still apply them when entering a new time or expense card. This works well if you only wish to charge tax on certain items for a particular matter, rather than for all associated time/expense entries.

To manage tax settings when entering a time or expense card:

From the Add Timecard/Expense Card or Edit Timecard/Expense Card screens, scroll down to Tax (for time and soft cost entries) or Tax Settings (for hard costs).
Check the box for Taxable.
Enter in the percentage of tax you would like to include.
When you create an invoice for this matter, it will calculate tax amounts associated with the items you set as taxable.

UpdatedMay 3, 2024

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