Though accepting payments through Venmo is fairly easy and a useful tool in thegif economy, it seems difficult to track sales tax. If you’re only using Venmo for services that wouldn’t be as big an issue, but what about when customers want to buy a product or add-on at the counter and Venmo is your only option? Anyone come up with a good method?
Alluding that services are not subject to sales tax is misleading. The state makes that determination, and some services are often subject to sales tax in some states.
Venmo is no different than other payment solutions, when you record the transaction in QB your record the sale with the amount subject to sales tax and let QB calculate the sales tax to get the total.
While automation is a wonderful theory, in application it falls short. Until such time as QB get a sales tax included function, download entries cause problems. Sales tax included would mean that you set the sales tax rate, enter the total amount and QB backs out the sales tax, posting retail sales and sales tax payable automatically.
I was actually thinking more about the tax collection experience in the Venmo app itself, not accounting for it in QuickBooks.
When you request a payment, let's say for $20, you simply enter "$20." If you enter it into QB, you've only collected the $20 and not the sales tax... so then do you adjust your retail costs so the cost plus tax come out to $20? Or do you shake down the customer for a few cents?
My curiosity was whether or not those who regularly use Venmo work sales tax into their product pricing, or do they just keep track of the tax for different sales and services.
You made a sale for 20, that sale includes sales tax, so in QB you would enter the sales price subject to sales tax, in Texas 8.25%. So 20 / 1.0825 = 18.48 is the retail amount it sold for.