Understand rounding of sales tax in QuickBooks Online

Learn how QuickBooks Online rounds sales tax when automated sales tax (AST) is on.

Know how rounding amounts can affect your sales tax calculations and reports in QuickBooks Online. When you file a sales tax return, the amount may be different from the total sales tax in QuickBooks Online. This can be due to small rounding differences when you add multiple transactions.

Round sales tax amounts

QuickBooks Online uses a combination of rounding:

Here’s how: 

Note: Only the states of Arizona and Virginia round their sales tax by line item.

Round sales tax by line item

QuickBooks Online can round the sales tax for each line item on your invoice or sales receipt:

Example: An item costs $1.23 and the tax rate is 8%. The sales tax is $0.0984. This tax rounds to $0.10.

Round sales tax by invoice or sales receipts

When QuickBooks Online rounds the sales tax for sales transactions:

Example: The total sales tax for all invoice items is $2.567. The total sales tax rounds to $2.57.

Know the difference between invoice-level and line item rounding

Line item rounding can cause total tax to be higher or lower than invoice-level rounding. Though invoice level rounding is more accurate because of reduced differences since rounding is only done once.

The table shows the difference between sales tax by invoice or sales receipt and sales tax by line item.