Hello dfortier1,
Welcome to Community! QuickBooks Online sales tax feature provides accurate sales tax calculations on your transactions, ensuring they're mapped correctly on your sales tax return. Having the sales tax set up correctly in your books, is vital to ensure your tax reports are accurate. I would be happy to provide more information on how the sales tax accounts work in QuickBooks Online.
When you set up a new tax code, you'll have the option to choose whether it's collected on sales or paid on purchases. In addition, you'll enter the rate and associated account. Here's a helpful guide to assist with setting up where you collect sales tax in QuickBooks Online. In addition, QuickBooks automatically adds the GST/HST Payable and GST/HST Suspense accounts, when you set up sales tax. Each transaction recorded with GST/HST/QST is added to the GST/HST Payable account. The GST/HST Suspense account should balance out and remain at zero. Once you've completed the sales tax return, a journal entry is created, that moves what you owe (or what is owed to you) from the GST/HST Payable to the GST/HST Suspense account. Recording the sales tax payment moves the amount from the Suspense account to the bank account. For more in depth information, follow this link.
Should you have other questions, or concerns, I recommend speaking with an accounting professional. If you don't have an accountant, we can help you locate a ProAdvisor in your local area.
Feel free to reach out again, if you have other questions. We would be glad to help!
