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New Top 5 Questions: Sales Tax

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Hello QuickBooks Community! As you can see, we’re back with another Top 5 and this time we’re revisiting a classic topic: Sales Tax. There’s never a shortage of questions surrounding this subject, so we’re giving you even more information to help you in your business. Time to get started!

1. How do I set the general ledger account for sales tax?

QuickBooks is always trying to make life easier for you. The Sales Tax Payable account is automatically added once the Automated Sales Tax feature is turned on and is where the sales tax for every transaction is reported.

If you wish to check those transactions, run a report to view them. Here’s how:

  1. Select  Accounting on the left menu and choose Chart of Accounts.
  2. From the list, select your Sales Tax Payable account and click the View Register dropdown, and pick Run Report.

Sales Tax Report.png

Once that opens, you can check out all of the transactions and customize the date range.

2. How do I make a sales tax adjustment?

If you need to decrease your sales tax due, you'll have to use an income account type for your adjustment. Choose an expense account if you need to increase the tax due. Here’s how to set this up:

  1. Go to the Accounting menu.
  2. Select Chart of Accounts.
  3. Click the +New button.
  4. From the Account Type drop-down, select Income or Expense.
  5. Select the account’s Detail Type. Note: Use Sales of Product Income for an income account and use Taxes Paid for an expense account.
  6. Name your adjustment account (i.e., ‘Sales tax due decrease’).
  7. Select Save and Close.

Sales tax adjustment.png

Now you're ready to add your adjustment!

  1. ​​Go to Taxes.
  2. Pick your Tax Period Date and the right agency.
  3. Find the Tax Period you need to adjust, then select View Tax return.
  4. Select Add an adjustment.
  5. Choose the reason for the adjustment from the dropdown menu.
  6. Add an adjustment date.
  7. Select the account for adjusting sales tax and the adjustment amount.
  8. Lastly click Add.

Sales tax.gif

Here’s a great resource for you: Create or delete a sales tax adjustment.

3. How to see all past sales tax payments?

Need to see payments from one year ago? Two years? It’s simple to do! Here’s how:

  1. Go to the Taxes tab, and then Sales Tax.
  2. Under Recent Sales Tax Payments, then click View All.
  3. The Transaction Detail Report will open and list all your sales tax payments. Choose Customize to adjust the date range. 
  4. Select Run report.

To view all sales tax owed, you can click the View Report button to see the Sales Tax Liability Report.

Sales Tax reports.png

4. Can I get Sales reporting excluding Sales Tax?

Let's use a Sales by Customer Detail report for this. Follow these steps below to get the information you need:

  1. Go to the Reports menu and search Sales by Customer Detail.
  2. Click the Gear icon on the report and then Show More to expand your options. Uncheck/check the columns you want to add or exclude. 
  3. Update the Report period and the Accounting method.
  4. Lastly, select on Run report.

Note: You can use the Save customization option, so you don't need to redo it when pulling up the same report. You can find this saved report in the Custom reports section.

Sales Tax customization.png

Check out more ways to customize your reports: Customize Reports in QuickBooks Online.

5. How do I remove the sales tax line from my invoices for a nontaxable customer?

While the sales tax line can’t be removed from the invoice when you create it, if you've unchecked the taxable status in their profile in the Additional Info box, it won’t show up on print preview or in the email.

Sales tax exempt.png

Once that’s done, go to Print Preview, or Save and Send on your invoice for that customer and notice no sales tax field is present!

Sales tax field invoice.png

Another Top 5 for the books! I hope this was helpful and added some QuickBooks knowledge to your day. Until next time, Community!

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