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Set up and use sales tax in QuickBooks Online

by Intuit Updated 3 weeks ago

Learn how to set up and use the sales tax feature in QuickBooks Online.

QuickBooks can automatically do the sales tax calculations for you on your invoices and receipts for easy and accurate filings.

Here's how to set it all up and get started.

If you just signed up to QuickBooks, set up where you charge sales tax for the first time.
To set up tax, follow the steps below:

  1. Go to Taxes and select Set up tax.
  2. Enter Tax name, Description, Tax agency name.
  3. Enter your Business ID no (optional).
  4. Select your Start of current tax period.
  5. Select your tax Filing frequency for Tax.
  6. Select your Reporting Method (usually it'll be Accrual, but if in doubt, please consult your accountant).
  7. Enter Sales rate, then select This tax is applicable on purchases, if applicable.
  8. Select Next, then select OK.

You can set up multiple tax agencies, If you wish to set up another tax agency; refer to Create custom tax agency.
Once you have set up the tax centre, you can also add custom tax rates.

Note: Depending on your location, QuickBooks may have taxes set up already for you. 

Rules for how to tax a product can change depending on where you sell.

When you're ready, you can assign sales tax to anything you sell. This lets QuickBooks know how much sales tax you need to charge based on what exactly you're selling.

Tax rates can also change if you ship products or perform services at your customer's address. And some customers are not required to pay sales tax, like churches, schools, and other non-profit organisations.

Make sure you have your customers' correct tax status, billing address, and shipping address entered in QuickBooks Online. Here's how to double-check and edit your customers' info in QuickBooks.

When you're done setting things up, you can start using taxes within your sales forms. We'll show you how it works and where you'll see it when you create an invoice or receipt for your customer.

Get a detailed look at the taxes you owe and why you owe them. This helps you make sure everything is accurate before you file and pay your sales tax return.

Learn how to run the Tax Liability report to view your sales tax info anytime.

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