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Create or delete a GST adjustment in QuickBooks Online

by Intuit Updated 1 month ago

Learn how to adjust your GST due if you use the GST feature in QuickBooks Online.

If you received a tax credit, discount, or fine, you can adjust the GST you owe. This way you don’t have to worry about making corrections when it’s time to file.

If you're adjusting the amount to be collected, it’s likely that the agency will still be expecting the original amount. That means you'll either be under-paying or over-paying your GST obligations.

There are a few reasons you might make an adjustment:

  • Credit / Discount: a credit/discount received from the agency.
  • Prepayment: an additional payment for a future return in the current filing period. 
  • Prior prepayment: a prepayment which was made previously. 
  • Other: penalties, interest, or rounding errors.

Here’s how to add or delete a GST adjustment in QuickBooks Online.

Add a GST adjustment

Step 1: Set up an account for GST adjustment

It’s important to use the correct account type when adjusting GST. Set up an expense account if you need to increase your GST due, or an income account if you need to decrease.

Note: If you already have these accounts, move on to creating the adjustment in Step 2.

  1. Go to Settings ⚙️ and select Chart of accounts (Take me there).
  2. Select New.
  3. From the Account Type ▼ dropdown, select Revenue or Expenses.
    • If you need to decrease your GST due, set up an income account.
    • If you need to increase your GST due, set up an expense account.
  4. Select the account’s Detail Type.
    • Use Sales of Product Revenue for an income account.
    • Use Taxes Paid for an expense account.
  5. Name your adjustment account (for example, GST due increase).
  6. Select Save and Close.

Step 2: Add an adjustment

  1. Go to Taxes.
  2. Find the tax period you need to adjust, then select Prepare return.
  3. Next to the entry you need to adjust, select Adjust.
  4. Select the Adjustment date and the Tax rate.
  5. Select the Adjustment account for adjusting GST.
    • Choose an expense account if you need to increase the GSTdue.
    • Choose an income account if you need to decrease the GSTdue.
  6. Enter the Adjustment amount.
  7. Enter notes in Memo, then select Save.

Delete a GST adjustment

You can also remove an incorrect GST due adjustment. After deleting the adjustment, you’ll no longer see it when you review your GST return on the Taxes screen.

  1. Go to Settings ⚙️ and select Chart of accounts (Take me there).
  2. Find the income or expense account you used to add an adjustment.
  3. Select Run report.
    Note: If the report appears blank, make sure you've selected the correct Report period and run the report again.
  4. Select the adjustment you need to delete and then select Delete.
  5. Select Yes to confirm.

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