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.

• Set up sales tax
• Collect sales tax
• Review sales tax reports
• Pay sales tax

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

• Handle cash basis sales tax
• Show multiple sales tax items on an invoice
• Refund sales tax collected from tax exempt customers
• Track sales tax on purchases from suppliers

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, select Manage Sales Tax and then select 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. Select the Tax Agency dropdown list and choose the agency to which the adjustment applies, such as Receiver General.
6. Select the Sales Tax Item dropdown list and select the sales tax item for the return line you want to adjust, such as GST Adjustments.
7. Select the Adjustment Account dropdown 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.