cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Intuit
13 helpful votes

Process sales tax adjustment

You may be required to collect taxes for certain goods and services you offer. QuickBooks Desktop helps you keep an accurate record of these taxes so you can easily monitor and remit them to the appropriate tax collecting agency.

This article is part of a series on Sales Tax. It covers the usual sales tax workflow in QuickBooks Desktop.

It also helps you complete other sales tax-related tasks.

If you encounter problems while working on your sales tax, see Resolve common sales tax issues.

Adjust the sales tax amount you owe

When you make sales tax adjustments, you move money into or out of your Sales Tax Liability account. You adjust your sales tax liability for reasons like:

  • A credit for previous over payment or early payment discount given by your sales tax agency.
  • A fine charged to you by your tax agency for late or non-payment in the previous tax year.
  • Corrections to sales in a previous period.
  • Rounding differences between QuickBooks and your sales tax forms.
  • Sales tax holiday declared by your agency.

To adjust your sales tax due:

    1. Go to the Sales Tax menu, click Manage Sales Tax and then click Adjust Tax Owing.
    2. Choose an Adjustment Date.
    3. Fill in the Entry No. field.
    4. (Optional) If you track classes, select a class for this adjustment.
    5. Click the Tax Agency drop-down list and choose the agency to which the adjustment applies, such as Receiver General.
    6. Click the Sales Tax Item drop-down list and select the sales tax item for the return line you want to adjust, such as GST Adjustments.
    7. Click the Adjustment Account drop-down list and choose an account.
    8. In the Amount section, enter the amount of the adjustment.
    9. (Optional) Enter a memo to describe the adjustment.
    10. Click OK.

Adjust amounts for sales tax items

You need to make adjustments for specific sales tax items if there are several types of sales tax payable to the same tax supplier. Adjusting the sales tax items allows the allocated amount to match the reporting as well.

To enter a positive adjustment or an increase in sales tax, use a Sales Receipt.

User-added image

  1. Go to the Customers menu and select Enter Sales Receipts.
  2. Leave the Customer field blank.
  3. Select the Tax drop-down and choose a 0% sales tax item.Note: If none exists, select Add New and create one.
  4. In the Item column, select the first empty line then select the sales tax item you want to adjust.
  5. In the Amount column, enter the amount of the adjustment then press Tab or Enter.
  6. Select OK when you receive the message "Changing the amount of a tax line item may cause your sales tax reports to be incorrect."
  7. Repeat steps 4 to 6 for any other sales items to be adjusted.
  8. Select Save & Close.

To enter a negative adjustment or a decrease in sales tax, use a Credit Memo.

User-added image

  1. Go to the Customers menu and select Create Credit Memos/Refunds.
  2. Select a customer name. Unlike the Sales receipt, the Credit memo requires that you enter a name. If you do not wish to use a real customer, click Add New and create a customer named Accountant Use Only.
  3. In the Item column, select the first empty line then choose the sales tax item you want to adjust.
  4. In the Amount column, enter the amount of the adjustment then press Tab or Enter.
  5. Select OK when you receive the message "Changing the amount of a tax line item may cause your sales tax reports to be incorrect."
  6. Repeat steps 3 to 5 for any other sales items to be adjusted.
  7. Select the next empty line then select a Discount item.
  8. In the Amount column, enter the total amount equal to the adjustment(s) entered in the previous line.
  9. In the Tax column, select Tax.
  10. Verify that the total amount is $0.00.
  11. Click Save & Close.

Was this helpful?

You must sign in to vote, reply, or post