tax-Insurance Claim "Tier tax" Question
Posted: Thu Jan 26, 2017 2:17 pmHello everyone. I have an Auto Body Shop in south Fl and we work with insurance companies. When an insurance company issues a check , they pay a "Tier 1" and a "Tier 2".
The Tier 1 is always at 7% on an estimate under $5,000.00 and then the Tier 2 is marked down to a 6%. on anything that goes over $6,000.00
Ex: If the total estimate is $5,100 before tax, then they pay $500 (which is 7%) and a second "Tier 2" of $7 (which is 6%).
Can someone please explain this me? My question is, what percentage do I report? Or do I charge that 1% to the client?? Or do I just report that same amount of tax that the insurance is paying us??
Thank you.
The Tier 1 is always at 7% on an estimate under $5,000.00 and then the Tier 2 is marked down to a 6%. on anything that goes over $6,000.00
Ex: If the total estimate is $5,100 before tax, then they pay $500 (which is 7%) and a second "Tier 2" of $7 (which is 6%).
Can someone please explain this me? My question is, what percentage do I report? Or do I charge that 1% to the client?? Or do I just report that same amount of tax that the insurance is paying us??
Thank you.
