How to invoice in the United States

No legal invoice format

Unlike most countries, the United States has no federal law that dictates what an invoice must contain, and there is no national VAT or GST. An invoice is a business record and a request for payment. That gives you freedom, but your invoices still need to be clear enough to get paid and complete enough to support your tax records.

What to put on a US invoice

• Your business name, address and contact details.
• Your client's name and address.
• A unique invoice number and the invoice date.
• A description of each product or service, with quantity, rate and amount.
• Sales tax as a separate line, if you are required to collect it.
• The total due, the due date and how to pay (bank transfer, card, check, ACH).
• Your payment terms, such as "Net 30", and any late fee you have agreed with the client.

Sales tax is set by each state

Sales tax is charged by states and often by cities and counties too. Most states have a sales tax; a handful (Alaska, Delaware, Montana, New Hampshire and Oregon) have no statewide sales tax, although some local areas in Alaska do. Rates, and which products and services are taxable, differ widely. Many services are not taxed at all in some states, while digital products and software are taxed in others.

You generally need to collect sales tax in a state where you have "nexus", meaning a significant connection. Having an office, staff or stock there creates nexus, and since 2018 most states also apply economic nexus: selling more than a set amount into the state (often $100,000 a year) triggers the obligation even without a physical presence. Before you charge sales tax you must register with that state's revenue department.

In the generator, use the tax line for sales tax and rename it, for example "Sales tax (8.25%)". If you sell to a reseller who gives you a valid resale or exemption certificate, you normally do not charge sales tax; keep a copy of the certificate.

Freelancers and Form 1099

If you work as an independent contractor, clients usually ask you for Form W-9 with your taxpayer ID before paying you. Businesses then report what they paid you on Form 1099-NEC. For payments made from 1 January 2026, the reporting threshold rose from $600 to $2,000 per client per year, and it will be adjusted for inflation from 2027. Some states still use lower thresholds of their own.

The threshold only decides when a client files a form. You must still report all of your self-employment income on your tax return, with or without a 1099, so your own invoices are your income record.

Keep good records

The IRS generally expects you to keep records that support your income and expenses for at least three years after you file, and longer in some situations, for example six years if income was substantially under-reported, and indefinitely if no return was filed. Many accountants recommend keeping invoices for seven years. Download a backup from My invoices regularly and store the PDFs safely.

Late payments

There is no general federal late-payment law for private business invoices. Late fees and interest are a matter of contract and state law, and some states cap interest rates. Agree any late fee in writing before you start, state it on the invoice, and keep it reasonable.

Official sources

• IRS – Recordkeeping for small businesses
• IRS – Form 1099-NEC and independent contractors
• IRS – Self-employed individuals tax center