Tax on Cheques: how to make it add automatically

aaaaaaaaaaaaa1 · ‎June 08, 2020

Is this where I ask questions? I recall being able to submit a question to the community, is this the same thing?

I've just switched over to QB Online from QB Desktop. I'm inputing cheques, and on QB Desktop I would enter the cheque as written and a 5% tax would be deducted off of that. For example, I put $400 and assign it to account 5040: rental equipment that has a 5% tax, and QB calculates that the amount is actually 380.95 with 19.05 tax, equalling the $400 cheque I wrote.

On QBO, when I put in the cheque, assign the account, and specify the 5% tax, it adds the tax on top of the cheque amount I wrote. So rather than say the cheque is written for $400, it says it is actually $420. How do I set it up so it deducts the tax from the cheque amount I have already written?

Thanks!

AddieC · ‎June 09, 2020

Hi there,

Making the switch from QuickBooks Desktop to QuickBooks Online is so exciting for you and your business! I know that switching to a different version of the program can come with a bit of a learning curve, and I'm here to help make sure the transition is as smooth as possible. I'd be happy to explain how you can enter your cheques to be inclusive of tax the way you did it in QuickBooks Desktop.

Depending on your preferences, you may decide that it's easier to enter your cheques or expenses as the full amount that includes the tax, and have QBO calculate the percentage for you. You can absolutely do that in QBO just like you've been doing in QuickBooks Desktop. All you have to do is toggle the "Amounts are" drop-down menu to be "Inclusive of Tax" rather than Exclusive of Tax.

I've included a screenshot here so you know just where to look.

I hope this helps get you back on track.

Since you're new to QBO, I'd also encourage you to explore our Tutorials page to get an overview of some of QBO's features and tools. These videos are so helpful in learning the ins-and-outs of QBO.

If you have any other questions, please don't hesitate to reach out to our tech support team.

Cheers.

View solution in original post

AddieC · ‎June 09, 2020

Hi there,

Making the switch from QuickBooks Desktop to QuickBooks Online is so exciting for you and your business! I know that switching to a different version of the program can come with a bit of a learning curve, and I'm here to help make sure the transition is as smooth as possible. I'd be happy to explain how you can enter your cheques to be inclusive of tax the way you did it in QuickBooks Desktop.

Depending on your preferences, you may decide that it's easier to enter your cheques or expenses as the full amount that includes the tax, and have QBO calculate the percentage for you. You can absolutely do that in QBO just like you've been doing in QuickBooks Desktop. All you have to do is toggle the "Amounts are" drop-down menu to be "Inclusive of Tax" rather than Exclusive of Tax.

I've included a screenshot here so you know just where to look.

I hope this helps get you back on track.

Since you're new to QBO, I'd also encourage you to explore our Tutorials page to get an overview of some of QBO's features and tools. These videos are so helpful in learning the ins-and-outs of QBO.

If you have any other questions, please don't hesitate to reach out to our tech support team.

Cheers.

lyle1 · ‎December 03, 2020

I would like the Amounts are to default to "Inclusive of tax" rather than "Exclusive of tax". How do I do this?

LauraAB · ‎December 04, 2020

Hi there lyle1,

Thanks for joining in on this thread about working with sales tax in QuickBooks Online. Being able to choose the default of the way sales tax is calculated on a form is definitely something that can help with entering your transactions and speeding up your workflow. I'll happily show you how this is done.

Luckily, this is a very simple setting to configure and you can change it whenever you'd like. Just follow along with these steps to change how QuickBooks Online handles sales taxes on your forms.

Select the Gear icon.
Choose Account and settings.
Click the Advanced tab.
Click the Accounting section.
Select the drop-down menu for Default tax rate selection to change it to Inclusive of Tax.
Click Save.

Once you've done that, all your forms will now display so that you can enter amounts as Inclusive of Tax. You also don't have to worry about prior transactions. The program will continue to have the accurate calculations for those transactions.

Give that a shot and let me know how it goes! I'm here to help you further if you need anything else.

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Tax on Cheques: how to make it add automatically