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Manage sales tax payments in QuickBooks Online

SOLVEDby QuickBooks102Updated January 10, 2024

Learn how to record, adjust and delete sales tax payments in the tax centre.

The tax centre has everything you need to handle tax in QuickBooks. You can run reports for your sales tax liabilities, record or edit sales tax payments, and see your payment for different time periods.

In this article, you'll learn how to:

Note:If you don't see the features mentioned below, you may be using the tax feature. Learn more about setting up and using tax.


Review sales tax reports

Get a tax liability report

  1. Go to Taxes and select Sales tax (Take me there).
  2. Select Reports.
  3. Select Taxable sales summary.

The report shows each sales tax agency, the taxable amount of sales, and payments.

See all of your tax payments

  1. Go to Taxes and select Sales tax (Take me there).
  2. To view the list of payments, go to the Payments tab and select View.

This opens a transaction report that lists all your tax payments. You can adjust the date range or customize to further refine the report.



Manage sales tax payments

Record a sales tax payment

  1. Go to Taxes and select Sales tax (Take me there).
  2. Go to Filings tab, locate the tax filing from the Filed section.
  3. Select Record payment option from the View summary dropdown.
  4. From the Refund to dropdown, select the account you're making the payment from.
  5. Select the Refund Date.
  6. Select the outstanding tax payment and adjust amount as needed.
  7. Select Add interest/penalty if you need to add one to the filing.
  8. Select Record payment at the bottom.

Adjust a sales tax payment

You can make an adjustment while filing your taxes.  In the Fillings tab, select Prepare return. On the Prepare sales tax return page select Adjust. Use this when you need to decrease or increase the amount of sales tax payment for things like credits, discounts, fines, interest, penalties, and corrections for rounding errors.

If you need to make an adjustment, go to Taxes, in the Returns tab, select Tax Adjustment. The Journal Entry window opens. Use this when you need to decrease or increase the amount of tax payment for things like credits, discounts, fines, interest, penalties, and corrections for rounding errors.

Enter the adjustment amount and reason for the adjustment. You can enter a positive or negative amount.

Then select an account to track the adjustment. Don't select the sales tax Payable account. Instead, use the following:

  • Credit or applying a discount: Select an income account, such as Other Income.
  • Fine, penalty, or interest due: Select an expense account.
  • Rounding error: Select an income account for negative errors, or an expense account for positive ones.
Note:Sales tax can get complicated. If you have questions, reach out to your accountant or tax agency.

Delete a sales tax payment

  1. Go to Taxes and select the Payments tab.
  2. Select Delete from the Action column. Then select Yes to confirm.

Note: After you delete a payment, the page doesn't refresh automatically.
Leave and come back to the Taxes menu. The payment shouldn't appear anymore.

If you see the messages "We're sorry, we can't delete filed tax right now. Please try again later." or "We're sorry, we can't deactivate the sales tax you selected. Please try again later. Contact support if waiting and trying again doesn't resolve the issue" while deleting a transaction, don't worry.

If the transaction is matched to a bank transaction

  1. Go to Transactions, then Bank transactions (Take me there).
  2. Select the bank account you used to pay for the sales tax payment.
  3. Select the Categorized tab.
  4. Find the transaction you want to delete. It should be matched to another transaction.
  5. Select Undo to unmatch the transactions.
  6. Go back to the Taxes menu and delete the transaction.

If you were using the earlier sales tax system and not the sales tax centre

If you see "This sales tax was recorded in the old sales tax system. Write a cheque to record a payment for this sales tax. Payments recorded via Write Cheque will not appear in the recent sales tax payments table below" don't worry. You'll need to edit each transaction that's part of the Original sales tax Payable amount.

  1. Find and open each transaction.
  2. Remove the current sales tax line item
  3. Use the sales tax items at the bottom of the invoice.
  4. When you're done, select Save.

Once transactions are re-associated, create a journal entry to move the liability from the new current sales tax liability account to the original sales tax liability account.

Note:
  • If you've been using QuickBooks Online and paying sales tax using the earlier method, you may need to record sales tax payments using the earlier method and the Sales Tax Centre for a time.
  • If you have outstanding transactions using the earlier sales tax method, record sales tax payments the same way you did in the past.  Record new sales tax payments in the Sales Tax Centre that charge the new rates you set up.

Learn more about how cash and accrual accounting affect sales tax.

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