Sales Tax Payable account does not match filing amount

quarfie · ‎January 24, 2022

In my GST/HST Payable account, I see a 2021-12-31 balance of -101.96

But when I go to the Sales Tax page and go to file, it says I owe 715.76 for the same period end.

I believe this problem may have started several years ago when I switched from QB Desktop.

How is it possible for these balances to not match? Does this happen when I post directly to the GST/HST Payable account, such as when paying import duty/tax to a customs broker? If so, how do I ensure these amounts are incorporated? And how can I post a single adjusting transaction to make the report match the account balance?

Trish_T · ‎January 25, 2022

Hi quarfie,

Thanks for reaching back out. It's essential that you're able to record the sales tax on imported goods accurately to keep your accounts aligned. QuickBooks Online has the flexibility you need to complete your daily bookkeeping tasks with ease. I'll be happy to provide the information you need so you're on track with your work!

Here's how to record sales tax paid on imported goods:

1. Click on +New at the top of the left menu and select Expense

2. Under Account details, on the first line, in the Account column, select the expense account associated to the imported goods

3. Enter 0.01 in the Amount column

4. Choose the sales tax code that represents all tax types paid

5.On the second line, in the Account column, select the same account

6. Enter -0.01 in the Amount column

7. Enter “out of scope” for the tax code

8. Edit the fields below the Subtotal to reflect the amount of tax paid for each tax type.

9. When finished, hit Save

You're all set!

Please don't hesitate to reach back out with any other questions. We'd be glad to assist!

View solution in original post

Nick K · ‎January 25, 2022

Hi quarfie.

Having the right information showing in your GST/HST Payable account and your sales tax filing is a great way to make sure nothing is missed. I'd be happy to go over why your information might be showing differently between them.

One of the main reasons this would show differently between the two accounts could be due to cash vs accrual accounting. So if you have cash selected it'll only show if once you receive or make a payment and with accrual it'll show once an invoice or purchase is created regardless of payment. You can check which your account is set up as by going to: Gear>Account and Settings>Advanced>Accounting. Another could be due to posts that were made directly into the GST/HST Payable account.

If you wish to make an adjusting transaction to your sales tax accounts you can do so by following the steps in this article. I recommend reaching out to an accountant before making an adjustment so they can take a look to see if it's needed or if everything has been entered correctly. If you don't have an accountant no worries, we can help. You can find one in your area by going to My Accountant>Find a pro to help.

If you have any questions let us know and we'd be happy to help.

quarfie · ‎January 25, 2022

It is already set to accrual.

I tested and found that when I post directly to GST/HST Payable account, it does not affect the amount when I go to file sales tax in Quickbooks. I tried setting the tax code for this line item to both E/Exempt and "Out of Scope", and in neither case was this amount reflected in the sales tax filing.

So I'm guessing that all of my import taxes over the last year or two have not been included in my filings.

What is the correct way to record tax paid on importation of goods? Is it impossible to post directly to sales tax account?

I don't want to post an "adjustment" because my sales tax payable account is already correct, I just want the filing to match what's already there...

Trish_T · ‎January 25, 2022

Hi quarfie,

Thanks for reaching back out. It's essential that you're able to record the sales tax on imported goods accurately to keep your accounts aligned. QuickBooks Online has the flexibility you need to complete your daily bookkeeping tasks with ease. I'll be happy to provide the information you need so you're on track with your work!

Here's how to record sales tax paid on imported goods:

1. Click on +New at the top of the left menu and select Expense

2. Under Account details, on the first line, in the Account column, select the expense account associated to the imported goods

3. Enter 0.01 in the Amount column

4. Choose the sales tax code that represents all tax types paid

5.On the second line, in the Account column, select the same account

6. Enter -0.01 in the Amount column

7. Enter “out of scope” for the tax code

8. Edit the fields below the Subtotal to reflect the amount of tax paid for each tax type.

9. When finished, hit Save

You're all set!

Please don't hesitate to reach back out with any other questions. We'd be glad to assist!

quarfie · ‎January 26, 2022

This is very helpful, thank you, and this is the answer to the original question, "How is it possible for these balances to not match?". The answer is that when you post directly to the sales tax account, it will never be incorporated into the filing.

And so the way you get them back in sync is to create an expense where you post directly to Sales Tax Payable the amount of the error, and then post the inverse of that to the actual sales tax field below, for a total of $0.

Thanks again.

virginiao · ‎January 10, 2023

Thanks for this clarity, quarfie.

It is beyond ridiculous that an accounting program 'ignores' journal entries. I now have a huge mess on my hands as I didn't realize this before netfiling. I will be switching to Sage because this is beyond an unreasonable program quirk.

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Sales Tax Payable account does not match filing amount