This has been plauging me for some time. Whenever I make a journal entry, I put in the total amount and Quickbooks automaticlally adds the 5% tax. The problem is that the total amount (a purchase for example) already has the tax included. What I want to know is if there is a way for me to be able to enter the total amount and have QB understand that the number is final, and figure out what tax was paid, subtracting the number instead of adding onto it?
It's great to see you're taking a pro-active approach to making sure taxes are recorded accurately on your journal entries. It's a stellar habit that'll save you a lot of time when filing your sales tax. QuickBooks Online treats journal entries on an Exclusive of tax basis, as they're typically used to affect various accounts by specific amounts. As a workaround, you're able to enter basic mathematical functions in transaction fields. As an example, you could enter an amount of $100 inclusive of 5% GST with the following simple function:
Selecting the GST tax rate for this line would result in an amount of 95.24 with taxes of 4.76, for a total of 100. As you're already well-versed with using journal entries, I'm confident you'll appreciate the incredible possibilities unlocked with this function.
I've got your back. Feel free to reach out any time, and I'll be happy to help.
I entered the function, and it worked, so thank you for that! You are right, that is pretty awesome.
I have a question on the result. So I paid my accountant $50, and entered the 50/1.05 which showed up as 47.62 as a credit to expenses. Then I debited my bank account and the same 47.62 was entered into the field. So is the amount of tax paid doubling as a result giving me an incorrect total in my tax account? And if I enter $50 then it won't balance, so I am just wondering what to do here?
Thank you so much for your help, I really appreciate it!