How to Write an Invoice

An invoice is a dated bill that tells a customer what they owe you, what it’s for and when it’s due. A good one includes your business name and contact details, the customer’s name and address, a unique invoice number, the invoice date and the date you did the work, a description of each item with its price, any sales tax shown separately, the total due, and your payment terms. The US has no single federal invoice format. The IRS does treat invoices as supporting documents for your books (IRS), and states set their own rules for how sales tax appears on a bill.

What to put on an invoice

What to include	Why it matters
Your name or business name, address and contact details	The customer knows who to pay and how to reach you
Customer’s name and address	Ties the bill to the right person or business in your records
A unique invoice number	Lets you and the customer refer to one bill without mix-ups
Invoice date and date of the work or delivery	Starts the payment clock and records when the sale happened
Description of each item: quantity, rate and amount	Shows exactly what the customer is paying for
Subtotal, sales tax (if you collect it) and total due	Keeps the tax separate from your price
Payment terms: due date and how to pay	Removes guesswork about when and how you get paid

If you’d like an official checklist to compare against, the UK government publishes one, though it’s a UK rule and doesn’t apply to US businesses. In the UK, every invoice must include a unique identification number, your company name, address and contact information, the customer’s company name and address, a clear description of what you’re charging for, the supply date, the invoice date, the amounts charged, any VAT, and the total owed (GOV.UK). Sole traders there must also show their own name alongside any business name (same source). The US list in the table above covers the same ground.

Why the details matter for your taxes

The IRS doesn’t say what an invoice has to look like, but it does expect you to keep records that back up your tax return. Invoices are on its list of documents that show the amounts and sources of your gross receipts, together with deposit records, receipt books and Forms 1099 (IRS). Publication 583 says these supporting documents matter because they support the entries in your books and on your tax return (IRS Pub 583). Publication 334 also recommends using a proper invoicing system and keeping a separate bank account for your business (IRS Pub 334).

When every invoice has its own number and a clear description, you can match each payment to a bill and each bill to the income you report. Our guide on reporting side hustle income explains where that income goes on your return.

Show sales tax as its own line

Whether you charge sales tax, and on what, depends on your state. Each state also decides how the tax has to appear on the bill. Texas is one example. The Texas Comptroller says sellers must separately state the sales tax they charge a customer. The only exception is if you both give the customer a written statement that Texas state and local sales and use tax is included in the sales price and prominently display a sign saying the same thing (Texas Comptroller). Out-of-state sellers with a Texas permit must label the tax “Texas sales and use tax” on their invoices (same source).

Other states set their own rules, so check with your state’s tax agency before you send your first taxable invoice. Showing tax on its own line also helps at tax time. IRS Publication 334 says that sales tax imposed on the buyer, which you collect and pass on to the state, generally isn’t included in your income, but tax imposed on you as the seller must be included in gross receipts (IRS Pub 334).

Payment terms and late fees

Write the due date as an actual date, and list the ways you accept payment. In the US, payment terms are something you and your customer agree on. If you want to charge a late fee or interest, put it in your agreement before the work starts, and check your state’s rules before you set the amount.

The UK makes a useful comparison because it has default rules. There, unless you agree on a payment date, the customer must pay within 30 days of getting your invoice or the goods or service (GOV.UK). If another business pays late, you can claim statutory interest of 8% plus the Bank of England base rate, unless your contract sets a different rate (GOV.UK). Those UK rules don’t apply to sales between US businesses.

When a client asks for your Form W-9

If you invoice businesses for services, expect some of them to ask you for a Form W-9. You use it to give your correct taxpayer identification number to someone who has to file an information return with the IRS (IRS). For most sole proprietors, that’s a Social Security number or an employer identification number (IRS Pub 583).

One reason a client may need it is Form 1099-NEC. For payments made in 2026, the IRS says the reporting threshold for payments to nonemployees for services is $2,000. It was $600 for payments made before 2026, and from 2027 it will be adjusted for inflation (IRS). The December 2026 Form 1099-NEC instructions also use the $2,000 figure (IRS). Publication 583, last revised in December 2024, still gives the old $600 threshold (IRS Pub 583). The newer IRS pages reflect the current law, so go by those.

Send the W-9 promptly. If you don’t give a client a correct taxpayer identification number, they may have to withhold 24% from your payments as backup withholding (IRS). Whether or not you get a 1099, the Schedule C instructions say to report all income from your business from all sources (IRS).

Send it and keep a copy

Send the invoice as soon as the job is done or the goods are delivered, while the details are fresh for both of you. Then file a copy where you can find it. The IRS says to keep records for 3 years in most cases, with longer periods in some situations (IRS). When a payment arrives, mark the invoice paid and record it with your other income. If you’re setting up a system for the money going out as well, see how to track business expenses. Your invoices also feed straight into your gross receipts, the starting point for working out gross vs. net profit.