Why isn't QB deducting the sales taxes that Etsy collects on my behalf? Those taxes are being included in my income for each transaction but I never actually see that $.

You'll have to manually categorize the transactions, satsumastreet.

The sales tax collected won't show up in QuickBooks Self-Employed as a separate transactions. QuickBooks will deduct the sales tax after you categorize them as Business. If the transactions fall into one category, you can bulk modify them.

Let me show you how:

1. Click the Transactions tab.
2. Click the box (select all) beside the DATE column.
3. Select the Business button.

You can take a look at this article for the detailed information about categorizing sales tax: Track sales tax in QuickBooks Self-Employed.

You always have my back in case you still need help.

Sorry, but I'm still confused. The transactions are already categorized as Business. QB pulls in my transactions from Etsy automatically, and automatically deducts whatever fees Etsy charges for the transaction. All those transactions are automatically categorized as Business. But they don't "deduct the sales tax after you categorize them as Business" as you stated.

I think the problem is with with how QB and Etsy are recording transactions. For instance, I had a sale today for $98.00. The customer was charged $5.88 in sales tax, and Etsy collects and remits that money to the state, not me. I never touch that $5.88. But when the transaction is pulled into QB, they record the income for that sale as $103.88. There is a separate transaction for Etsy's fees for that sale, -$3.37. My actual profit on that sale is $94.63, but because the sales tax is included, QB records my profit as $101.

I'll help with your Etsy transactions, satsumastreet. 

If the downloaded transaction is $103.88, click Split and categorize $98.00 as income and the remaining amount as sales tax.

Then, record the Etsy fee as a separate transaction. Just go click the Add transaction button under the Transactions menu. 

Follow these steps on how to split a transaction:

1. Go to the Transactions menu.
2. Look for the payment and click the Split button under the Type column.
3. Split the transaction and assign the correct category.
4. Click Save.

Here's an article about splitting transactions: Split and Exclude Transactions.

I would also recommend contacting our phone and chat support team so they can review the downloaded transactions and make sure that they're categorized accordingly. Here's how:

1. Click Assistant.
2. Select talk to a human twice, then click I still need a human.
3. Click Get a callback. 

Please add another reply below if you have follow-up questions.

@satsumastreet 

To complement your QBO, explore this AST Reporting and Filling to integrate with your Etsy account.

https://taxjar.grsm.io/mytax

Hope it helps.