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Level 2

My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting to change that to a cash basis. How do I do that? I called them and no help.

 
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Best answer 01-29-2019

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ProAdvisor

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

@Oscillate Wildly

 

You have a new automated Sales Tax system which is for accrual-based sales tax filing return. If you're filing cash basis Sales Tax return, the one you've is not the right system. And it will not properly work for your business. You need old manual Sales Tax feature available in QBO.

 

I know exactly what you're experiencing. This is nothing new. If I were you, I would call QuickBooks Tech Support (ask for higher Tier support) and demand you need OLD MANUAL SALES TAX in QBO. Don't take NO for an answer. I know in the past they were able to switch from new automated sales tax system back to old manual (cash or accrual switch) sales tax feature upon request. Allow them some time like one week or so to fix it. Because that's what you need in QBO to make this sales tax work to do business,  I think. 

 

Hope this helps!

 

 

'

 

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24 Comments
Moderator

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Greetings, @Oscillate Wildly.

 

Welcome and thanks for reaching out to us here in the Community. I can help change the accounting method of your sales tax report in QuickBooks Online (QBO).

 

Just to confirm, when you say you're already in cash basis, are you referring to your overall accounting method? If so, then your sales tax report should be the same. But if not, you can change it in your company settings. Here's how:

 

1. Go to the Gear icon at the top, then pick Account and Settings under Your Company.
2. Select Advanced on the left panel and click the Pencil icon on the Accounting field.
3. Choose Cash on the Accounting Method drop-down.
4. Click Save and Done.

 

 

 

Once done, pull the Sales Tax report again to double-check. For your reference, you can also check out this article for more information: Change the accounting method.

 

That should do the trick! Let me know how it goes by leaving a comment on this thread. I'd be glad to answer if you have any additional questions. Take care and have a great rest of the week.

Level 2

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Overall I do have the setting set to Cash. But when I go into Taxes and click on View Return, it pulls the numbers in accrual. I'm not sure why. I've been calling QB Tech support for two days. Three different people can't answer me or give me direction. Ugh!

Moderator

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Thanks for coming back, Oscillate Wildly.
 

The Sales Tax Center in QuickBooks Online shows both accrual and cash basis. Let's take a closer look on how these accounting methods affect your sales tax owed. 

 

An invoice is a posting transaction. Even if you haven't received the payment, they are already affecting your income statement. For example, you created an invoice in June 2018 and received the payment in January 2019. In Sales Tax Center, the taxes you owed for this invoice will be reported in June 2018. 

 

A sales receipt is also a posting transaction. You report the revenue when cash is received. Since transactions aren’t recorded until the cash is received or paid, the business’s income isn’t taxed until it’s in the bank.
 

QuickBooks recognizes the taxes owed based on the transaction you've created. That's the reason why you're seeing the numbers in accrual. To show the taxes you owed in cash basis, you would need to run the Tax Liability Report. You use this report to file your return to the IRS. 

 

1.PNG 2.PNG
Let us know if you have any questions. Thanks! 

Level 2

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

So in short, you are saying that if I report sales tax on a cash basis then the sales tax center isn't going to work for me. I need to just run a liability report and make sure its ran as a cash basis report and report my sales taxes to the state based on that report.

 

So should I turn off sales tax reporting under Taxes in settings in QBO? And just rely on the report? If I do, I'd need to know JE's to move liabilities and such around. Guess I'd need to talk to my accountant on what to do there.

 

Am I understanding you correctly?

Level 2

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

By the way, I knew about the liability report because that's the only way I figured out that it was reporting as an accrual. Under Taxes and under View Report, it doesn't say its in cash or accrual. That's why I went all year last year thinking it was cash basis because I had selected that basis when I set up QBO in the main account settings.

QuickBooks Team

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Thanks for coming back, Oscillate Wildly.

 

You'll need to manually change the accounting basis on sales tax center. And I'd be glad to help you with this.

 

You can go back to your Sales Tax Center, and from the Start of Year and Accounting Basis drop-down, choose Cash to filter. From there, you can see the sales tax center on a cash basis.

 

Please feel free to read this article for your reference: Set Up Your Sales Tax.

 

Also, I still recommend seeking help from your accountant. He/she could guide you what to do about your sales tax reporting.

 

Don't hesitate to leave a comment below. I'd be glad to answer if you have any additional questions.

Level 2

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

I'm not sure I'm getting this point across correctly to everyone. I set up my sales tax center a year ago. I just realized that the reports I've been using in the sales tax center are pulling the amounts owed to the state in an accrual base accounting. Prior to me using QBO and paying state taxes, I paid in a cash basis. You can't change that method with the state unless you fill out a bunch of paperwork. So QBO is set up as a cash basis business for me but the tax center isn't pulling the reports in cash but in accrual. Not sure why or where that setting is. I thought it would be based on the cash base setting I have the company set up as in QBO but it's not. To me this sounds like a QBO issue. But I'm unsure. Why if my main setting in QBO is cash basis is the View Return button in the sales tax center pulling it as an accrual base setting?

QuickBooks Team

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Allow me to join the thread, @Oscillate Wildly.

 

QuickBooks Online is designed to become a one stop-shop for small business owners in preparing your tax related reports. With that being said, I am here to share some details on how the transactions are included on your Sales Tax reports.

 

As what my colleagues mentioned, QuickBooks online is using two accounting methods in displaying your reports. Whether you indicate Cash base or Accrual in your Company settings, you still need to manually tell the system what method to use in generating a specific report. This ability allows you to toggle and see how you company's financial looks like in different perspective.

 

If you need further assistance, I’d recommend reaching out to our Customer Care Team. A specialist will be able to access your account in a secured environment and further assist you via remote access.

 

Here's how to contact us:

  1. Visit: https://help.quickbooks.intuit.com/en_US/contact.
  2. Choose your QuickBooks Product.
  3. Select your QuickBooks Version.
  4. On the Contact Us page, click a topic.
  5. Click on the Get Phone Number button to see the support number.

Keep me posted on how things work on your end. I’m always here to help you generate your Sales Tax reports. Have a great ahead!

Level 2

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Everyone listen, I'm not running reports. I get the fact that I can run a report and change it back-and-forth from Cash to Accrual based reporting to see both ways. I'M NOT ASKING ABOUT REPORTS! I'm asking about the State Sales Tax View return feature in QBO which is supposed to help record your monthly sales tax payments to the state.

 

In QBO, I have a list of accounting options to choose from on the lefthand side of my screen. It starts with Dashboard and works its way down with Banking, Sales, Expenses, Workers, Taxes, Accounting, My Accountant, Capital and ends with Apps. If I click on Taxes, the next screen that pops up gives me two options, Sales Tax or Payroll Tax. Under the Sales Tax heading, it gives me a monthly option (button) to choose to record the payment of my sales tax to the state. When I click on that button which is called View return, it pops up with a screen to allow me to review and record my sales tax payment. This is where the problem is. This screen shows my sales tax in accrual based reporting. When in fact, it should not be. I pay my sales tax on a cash bases. 

 

How can I correct this? If I can not, I guess I turn off the state sales tax feature and record everything manually. But I'm not paying QBO for me to do things manually. This sales tax feature should work for me.

 

AmI seeing this wrong? Why are so many of you keep suggesting I change the report from accrual to cash? It's not a report. It's a sales tax payment feature in QBO and it's pulling the wrong numbers for me.

QuickBooks Team

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Hi @Oscillate Wildly.

 

Allow me to step in to this thread to fix your concern about sales taxes and have you get back to business.

 

Before anything else, thank you for providing me the specific details of where you're having problems with. 

 

For this, you don't need to turn off your sales tax settings. Please follow these steps on how to change your sales tax accounting method and view them under Cash basis.

  1. On the left panel, click on Taxes.
  2. On the Sales Tax Center, click on the accounting method drop-down, choose Cash.

 

It'll then show your sales tax under the Cash basis.

 

Also, you can read this article for your future reference: Manage Sales Tax Payments.

 

If you have any other concerns, please leave a comment below.
 

Level 2

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Woah, my screen doesn't look like that. But I'm in the same place. Why is that?IMG_3751[1].jpg

QuickBooks Team

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Hello there, Oscillate Wildly.

 

My colleague provided a screenshot of the old sales tax center. What you have is the Automated Sales Tax already.

 

It seems like your accounting method is set up to accrual before turning on the sales tax feature. Though, if you've changed it to cash, the sales tax center will still display based on the accrual method.

 

You can use the Sales Tax Liability reports to check the correct tax payments recorded in the system. Here's how:

  1. On the Sales Tax page, click Reports.
  2. Choose Tax liability report.

I've got you articles that you can check:

You can always drop by if you need more of our help. We're just around. 

ProAdvisor

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

@Oscillate Wildly

 

You have a new automated Sales Tax system which is for accrual-based sales tax filing return. If you're filing cash basis Sales Tax return, the one you've is not the right system. And it will not properly work for your business. You need old manual Sales Tax feature available in QBO.

 

I know exactly what you're experiencing. This is nothing new. If I were you, I would call QuickBooks Tech Support (ask for higher Tier support) and demand you need OLD MANUAL SALES TAX in QBO. Don't take NO for an answer. I know in the past they were able to switch from new automated sales tax system back to old manual (cash or accrual switch) sales tax feature upon request. Allow them some time like one week or so to fix it. Because that's what you need in QBO to make this sales tax work to do business,  I think. 

 

Hope this helps!

 

 

'

 

View solution in original post

Level 2

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Finally! I thought I was going crazy with everyone telling me to change my reports. Sorry to all that I wasn't able to give you all a better description of my issue. I will reach out to QBO Customer Service for the 3rd time about this issue. Both the previous times before I came here, they said they couldn't help. But I'll go to a higher tier. Thanks again.

Anonymous
Not applicable

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Hi, @Oscillate Wildly.

 

Thank you for the response. Yes, vpcontroller is right, you'll need to contact our Online Care support since you needed the old manual sales tax in QuickBooks. They can access your account in a secure environment and help get this issue escalated.

 

That said, if you need anything else, please feel free to visit the Community again. Have a good one.

 

 

Level 1

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

I totally understand what you were talking about from thread 1 as I am having the same exact issue. It's very frustrating cause it won't let me match sales tax payment since I filed on a cash basis but the report is accrual basis.

QuickBooks Team

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Hi Rainey, 

 

The option to match sales tax payments for cash basis is currently not available in QuickBooks. I suggest submitting your feedback about this. You'll also want to manually reconcile the payments in the bank register. Here's how: 

 

  1. Go to the Accounting menu and select Chart of Accounts
  2. Click on the View register link to open the transaction list. 
  3. Under the check symbol column, repeatedly click on the box until it is marked as R (reconciled).
  4. Click on Save
  5. Choose Yes if a pop-up would appear. 

Get back to me if you have other concerns. 

Level 1

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Quickbooks continually disappoints me...but other solutions are much more expensive. I don't understand how Intuit screws up these simple features - they've been in this business for what...20 years?!

 

Hopefully the automated tax center allows for cash-basis accounting soon... I don't see why it is so difficult to implement.

Level 1

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

I too have been having this problem but I am using Quickbooks Desktop Pro.  For instance, in March we received payment of April invoices.  We are on a cash basis only.  When I run the sales tax liability report for March, the payment doesn't show up unless I run it for April which is when the invoices were dated.  We have been set up as cash basis only, never accrual, and have had to manually calculate it every month as it's not accurate.  

Level 1

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Hi there,

 

I'm not sure if your problem is resolved by now. But I had the same problem, my account settings were set to cash basis but when filing taxes I would get collected tax amount and ITC's on an accrual basis. And NO changing the report settings does not change the filing settings.

 

I don't know what version of Quickbooks you have but I can share what I did on mine and I'm sure yours would be similar if not identical.

 

- Go to Taxes Tab.

- Find "Manage Sales Tax" Button.

- On the new window you will see different types of Tax Agencies you have. Each one should have a drop down next to it called "Add Rate" .... DON'T ADD A NEW RATE but open the drop down list and find something to the effect of "Edit Agency Settings". Click on it and change the method there and save.

 

You have to do this for all different tax agencies separately.

 

Run a sample "Prepare a Tax Return" to see if now you get "cash basis" numbers that you were looking for.

 

Hope it works for you, it did for me.

 

QuickBooks Team

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

Greetings, @kellyk1977.

 

You can change the accounting method for your reports in your Preferences. Let me guide you through the steps.

 

Since your reports are based on your transactions, you can set them to cash basis. By changing the accounting method, you won't have to manually calculate the taxes for it to be accurate.

 

Here's how you can change the accounting method for your reports:

  1. Click on Edit from the menu bar.
  2. Choose Preferences.
  3. Click on Reports & Graphs.
  4. Under the Company Preferences tab, select Cash.
  5. Click on OK.

Moving forward, you'll now be able to view your Sales Tax Liability report in cash basis.

 

Please click on the Reply button if you have any other concerns. I'll be around to assist you.

Level 1

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

I'm sorry QBO, but this question is not answered.  I've worked with support for several hours and no one seems to be able to fix this problem.  They can't switch me to manual sales tax.  This seems to be a basic feature that should be offered.  At least train your support reps in this new automatic sales tax prison you've put us all in.

Moderator

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

This isn't the type of service we want you to experience, @anabananz4.

 

I understand how you feel when something isn't working the way you need it to. This time, we're unable to switch back an automated sales tax settings to the old one.

 

This is because all the newly created accounts will automatically be using the new automated sales tax settings. In case you need some reference, here's an article you can read to learn more about the new automated sales tax settings: Set Up and Use Automated Sales Tax.

 

As always, you can visit our Income and Expenses articles in case you need some tips and related references for your future tasks.

 

If there's anything else that I can help you with, please let me know in the comment section down below. I'll be always around ready to help.

Level 1

Re: My acct method is cash basis but QBO reports sales tax in accrual basis for me. I'm wanting t...

The automated sales tax lacks some basic functionality.  I've used QB desktop for more than 10 years now.  I was able to get my case escalated to revert back to manual sales tax.  Sometimes business owners actually know better than a computer.  Maybe the engineers should consult actual small business owners before making features unavailable or automatic.

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