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Sales tax after importing your QuickBooks Desktop file into QuickBooks Online

SOLVEDby QuickBooksQuickBooks Online6Updated 2 days ago

You may notice some differences in Sales Tax after importing your QuickBooks Desktop company file into QuickBooks Online.

Difference: Your Accounts Payable (A/P) and/or Accounts Receivable (A/R) account balances are different.
Reason: 

  • When you filed sales tax in QuickBooks Desktop, a general journal was created with amounts against A/P (in the case of a tax amount owing) and A/R (in the case of a refund).   Paying the bill or receiving the payment closed the journal.
  • In QuickBooks Online, instead of using A/P or A/R, QuickBooks Online creates a new suspense account that retains amounts owed/owing to tax agencies.
  • If you have completed a filing but have not yet made or received a payment for that filing before you moved to QuickBooks Online, the amounts will be moved from the A/P or A/R accounts in QuickBooks Desktop to this new suspense account in QuickBooks Online.

Difference:  You can’t find your existing sales tax payments or refunds (that would have appeared in the bill payments window in QuickBooks Desktop).
Reason: 

  • QuickBooks Online manages these payments and refunds in the Sales Tax Centre.
  • Go to Taxes and select Sales tax (Take me there) to view your payments and refunds in QuickBooks Online.

Difference: Your existing filing PDFs in QuickBooks Desktop don't show up in QuickBooks Online.
Reason: 

  • Existing filing records are not retained.  It's a good idea to print or save copies for your PDFs from QuickBooks Desktop before moving to QuickBooks Online.
  • Any new tax filings completed in QuickBooks Online will be stored as usual.

Difference: You used to file with your tax agency on a bi-monthly schedule, but it now shows up as monthly in QuickBooks Online.
Reason:

  • QuickBooks Online doesn't offer a bimonthly filing frequency schedule, and therefore defaults to monthly.
  • Go to Taxes and select Sales tax (Take me there) to change these details in QuickBooks Online.

Difference: The liability accounts you used to track sales tax in QuickBooks Desktop have different balances in QuickBooks Online.
Reason:

  • If you tracked your tax on sales to a different liability account than your purchase account in QuickBooks Desktop, you'll see a difference in QuickBooks Online.
  • Transactions that had tax that tracked to GST Payable Purchases in QuickBooks Desktop will track to GST/HST Payable in QuickBooks Online.
  • You'll also see a difference in your chart of accounts, but the two accounts will balance when taken together, and your tax reports will be correct.

Difference: You see new expense accounts for some of your tax agencies.
Reason:

  • If you had tax agencies that did not track tax on purchases separately to an account, a new expense account will be created and used in QuickBooks Online.
  • In QuickBooks Desktop, all the expenses associated with purchase transactions were rolled up into the expense account on the respective purchase line item.
  • After these transactions are imported into QuickBooks Online, they will look different, but your sales tax balances will be correct.
  • New transactions created in QuickBooks Online will now track this expense tax to the newly created expense account.

Difference: You didn’t track tax on sales, or you tracked the tax to an income account, and it now tracks to a liability account.

Reason:

  • QuickBooks Online doesn't support tracking tax on sales as an income.
  • Instead, tax amounts track to a newly created liability account.

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