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Set up and use Smart Sales Tax Envelope

SOLVEDby QuickBooks28Updated 1 week ago

Learn how to automatically save sales tax you receive in an envelope.

QuickBooks makes saving for sales taxes even easier by using Automated Sales Tax and Envelopes. Envelopes help you save money for emergency savings or specific purposes.

Start to save

  1. Turn on Automated Sales Tax. Check out how to set up and use automated sales tax in QuickBooks Online.
  2. Select Smart Sales Tax Envelope.
  3. Select Create envelope.
  4. Review the Autosave schedule and amount to be transferred from QuickBooks Checking.
  5. Select Add envelope to complete setup.
  6. Select Transfer now to make the initial transfer now or Do it later to make the initial transfer later.

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Calculate what to save

QuickBooks uses your sales tax liability report to calculate how much needs to be transferred from your QuickBooks Checking account into your Smart sales tax envelope.

QuickBooks calculates the difference between your current sales tax liability and the balance of your Smart sales tax envelope. If there is a deficit, QuickBooks will transfer the amount equal to the deficit, from your QuickBooks Checking account to the Smart sales tax envelope.

The goal is to always match your Smart sales tax envelope balance to your current sales tax liability. Current sales tax liability can be viewed in the Sales Tax Center.

Remember, you must record tax payments you make in the Sales Tax Center. If you don’t record these payments, your liability will continue to grow, and the envelope will save for taxes you’ve already paid. 

Learn how QuickBooks calculates sales tax.

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Record a tax payment to make sure your liability is calculated correctly

  1. Go to Taxes, then select Sales tax (Take me there).
  2. Find the return you just filed, then select View Tax Return.
    Note: If you paid for an older return, use the Tax Period Date dropdown to select a tax period or custom date range.
  3. Select a filing method, then select Record payment.
  4. Enter these payment details:
    • Tax amount
    • Payment date
    • Bank account
  5. Select Record payment.
  6. Select Back to sales tax center.

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When the funds transfer to the Smart Sales Tax Envelope

As long as you turn on Autosave, QuickBooks will transfer your savings from the QuickBook Checking account to the Smart sales tax envelope every Monday.

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Can you change the transfer date?

You can't change the transfer date. It's systematically selected.

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If you don’t have enough money in your QuickBooks Checking account

You'll receive an email the day before your Autosave processes to remind you of the upcoming transfer and amount. Review your QuickBooks Checking balance to make sure you have enough funds in the account. Get more info about how to transfer funds into QuickBooks Checking.

If the balance of your QuickBooks Checking account is less than the Autosave amount, the transfer won't process. QuickBooks will send you an email to tell you we weren’t able to put money aside that week. The balance of the sales tax liability will roll into the following week’s Autosave. You can manually transfer funds into the Smart sales tax envelope at any time. There's no penalty if the event there aren't enough funds to transfer.

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Pay your sales tax from your QuickBooks Checking Smart sales tax envelope

Before you pay, you must transfer the money from the Smart sales tax envelope to QuickBooks Checking.

Next, you can file and pay with the right tax agency using your QuickBooks Checking account. Find out how to File your sales tax return and record tax payments in QuickBooks Online.

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Manually transfer into the Smart sales tax envelope

Yes, you can manually transfer funds into your Smart sales tax envelope at any time.

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Turn off automatic savings

To stop automatic transfers

  1. Go to QuickBooks Checking and select the Smart sales tax envelope.
  2. Switch Autosave off and select Turn it off.

You can turn Autosave on and off when you need to. When you turn Autosave back on, the next transfer will be calculated to meet the total sales tax liability accrued since you turned it off.

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