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cmhowarth
Level 1

What does out of scope mean as tax code on a deposit

 
5 Comments 5
AddieC
QuickBooks Team

What does out of scope mean as tax code on a deposit

Hi there, 

 

Taxes are an inevitable part of running a small business. QuickBooks Online is designed to make your tax-related tasks as simple as possible, offering default tax codes that are readily available based on your region. I'd be happy to explain what the Out-of-Scope tax code means for your bookkeeping. 

 

The Out of Scope tax code is something you should assign to transactions that have no impact on your tax liability or returns. The other two zero-amount tax codes are Zero-rated and Exempt. Those two codes should be used based on the guidelines on the CRA website. Essentially, Out of Scope transactions won't hit the tax centre in QBO at all, and they'll be completely separated from the tax tracking feature. 

 

I hope this helps clarify things for you. For more information on the tax codes available in the system, check out this helpful article: Common sales tax codes.

 

Have a great day. 

 

scorc042
Level 1

What does out of scope mean as tax code on a deposit

Is there no ability to set up this "Out of Scope" tax code in QuickBooks Desktop (or something that achieves the same result)? I cannot find it in the Desktop version, and everything online in the help only associates questions about it with QBO.

 

Thanks in advance,

 

Scott

JamesM4
QuickBooks Team

What does out of scope mean as tax code on a deposit

Hello scorc042. Thanks for contributing to this post. QuickBooks Desktop is a great program for managing your business and keeping track of your taxes. I'll be happy to share more info on this so you can get back to doing what you love. Depending on your goal, you can take advantage of the existing tax codes such as Exempt and Zero-rated. I encourage you to check out this helpful article which goes in depth on how to: Set up sales tax in QuickBooks Desktop. Let me know if you have questions. I'm here to help. 

scorc042
Level 1

What does out of scope mean as tax code on a deposit

Hi James,

I have been through that material. The exempt and zero-rated do not work for me - I basically have items that hit our invoices that are not HST applicable, it appears the set up was a work around to show our real estate trust deposits applied to final commission invoices. It works perfectly for tracking everything trust related, except that those items get pulled through as negative sales to line 101 of our HST return. The previous accountant had not been using the file sales tax system within QuickBooks (which I just managed to remedy this week), now the only issue left is the inaccuracy of line 101.

In the absence of an Out of Scope type code in QB Desktop, I thought maybe I could try and associate tax codes for the trust line items to another placeholder tax agency that doesn't file, use a 0% tax rate. However I must have done something wrong, because those amounts still pulled through to the Receiver General GST/HST Tax Agency Detail Report despite showing the new tax code?

JamesM4
QuickBooks Team

What does out of scope mean as tax code on a deposit

I appreciate you elaborating more on this. It's important you get the help you need with this and our support team can take a closer look at your account and help you get back on track. I recommend contacting a specialist, by calling 1-833-317-2226. To find out more about our hours and other contact methods, please follow this link here: Intuit QuickBooks Desktop software support policies. Let me know if you have other questions, I'm here to assist. 

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