Assigning the proper tax code to your transactions is important. It's great that you've integrated Square with your QuickBooks Online account. This definitely makes your life easier, as you can process on-the-go payments and see them automatically appearing in your account. I'd be happy to explain how to change the 'tips' transactions to Out of Scope, rather than Exempt.
Once you see the sales transaction in your account, simply open it by clicking Sales > All Sales > single click the tips transaction. Click on the Sales Tax drop-down menu, and select Out of Scope. Click Save and Close.
This will have to be done manually on each tips transaction you receive. You can also reach out to Square to see if there's a setting on their end that can automate Out of Scope categorization for future transactions.
I hope this helps. Let me know if you have any other questions.
Have a great day!
Hi AddieB, yeah we've been manually changing hundreds and hundreds of these things using the process you gave. So you're saying to change these globally it's something on Square's end I need to look at? ok thanks!
Yes, that's correct. Since the transactions are being filtered in from Square, you'll have to speak with them for any further troubleshooting. If there's anything else I can do for you, let me know.