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Maid LIz
Level 2

Overpayment invoice record as a tip

I follow th step to record an overpayment invoice as a tip. But the invoice is calculating the sales tax so now my balance is more. How I can fix this?

7 Comments 7

Overpayment invoice record as a tip

Let me help your invoice balance, @Maid LIz.


You'll have to contact your state or accountant and check if the tip is taxable. That way we can perform troubleshooting steps to get this fix.


If you don’t have an accountant available, you may visit our ProAdvisor's page. You can contact one of our ProAdvisor's and ask them for accounting advice.


If your accountant says the tip is not taxable, you can edit the transactions created and uncheck the box in the Tax column. This way it will not calculate as taxable.


Here's how to edit the invoice:


  1. Click Sales in the left-hand menu.
  2. Select the Invoices tab.
  3. Scroll to the invoice you wish to edit and click on it to open it up.
  4. Uncheck the box in the Tax column.
  5. Make the necessary changes.
  6. Click Save and Close.


I'm also adding this article on how to properly record invoice overpayment: Record an invoice overpayment as a tip.


I've also added these articles that will guide you in handling the sales transactions in QuickBooks:



You can always go back here if you have other questions. I'm always around to help you more. Take care and stay safe always, @Maid LIz

Maid LIz
Level 2

Overpayment invoice record as a tip

yes Tips are taxable. Also I follow a post from here on how to record an overpayment invoice as a tip. I did but I dont see it in the chart of account as a tip instead I think it recorded as income from the invoice. I dont know if I did right.


Overpayment invoice record as a tip

Welcome back, Maid LIz.


I appreciate the efforts you've made by following the steps on recording an invoice overpayment as a tip. Let's work together to sort this out.


When a customer overpays you as a tip, you'll have to create an income account and tip item to track them. The tip item may not link to the newly created Other Income account that's why it doesn't show up in your chart of accounts.


Let's take a look at the item and make sure it's associated with the Other Income account.


Here's how:


  1. Go to the Sales menu, then Products and Services.
  2. Locate the Tip item, then click Edit.
  3. Under the Income account, ensure that the Other Income account created is selected.
  4. Once done, hit Save and close.


For more details, check out this article for a complete guide: Record an invoice overpayment as a tip.


In addition, I've included this resource so you'll learn how to personalize and filter your report to display the information that matters the most to you: Customize reports in QuickBooks Online.


Don't hesitate to reply if you need further assistance in recording tips. We're always here to back you up.

Maid LIz
Level 2

Overpayment invoice record as a tip

My saids Tip Income is that correct or it has to said Tips Revenue like yours?


Overpayment invoice record as a tip

It's based on how you name it, Maid LIz.


The Tip Revenue display on the screenshot is how I named the newly created Other Income account. If yours is Tips Income, then the tip item should be associated with that account. 


Here's how I created the Other Income account:


  1. Go to Accounting, select Chart of Accounts.
  2. Click New.
  3. For Account Type, select Other Income.
  4. For Detail Type, choose Other Miscellaneous Income.
  5. Enter a Name as Tip Revenue.
  6. Hit Save and close.


Then, you can follow the steps above if you already have the tip item and ensure that it's linked to the Other Income account you've created to track the tip you receive from your customers.


You can also provide me a screenshot of how you created your tip item to double-check it and figure out why it isn't showing up on the chart of accounts.


Additionally, I've added this article for future reference if you need to refund your customer's money: Record a customer refund in QuickBooks Online.


I'll keep an eye on your response. Feel free to add any details below. I'll get back as soon as possible with more detail.

Maid LIz
Level 2

Overpayment invoice record as a tip

Below I attached a picture. You dont see the amount on that area but if you click report you will see it. Do you know why is not showing the amount in the chart of accounts?


Overpayment invoice record as a tip

Hello, Maid LIz.


Thanks for getting back to us in the Community. Allow me to chime in and share information about the income accounts in your Chart of Accounts (COA).


I'm unable to view the picture you've mentioned for some reason. But, if you're referring to the balance column in the COA, income accounts won't show any amounts since it has no register.


 For accounts that don’t have a register, you can run a report to see transactions on that account. To view the register or reports from your COA list, select either View register or View report from the Action column.


For more information about the COA in QuickBooks Online (QBO), consider checking out this article: Learn about the chart of accounts in QuickBooks Online.


For more tips and other resources, you may visit our website for future reference: QBO self-help articles.


Post again or leave a come in this thread if you have additional questions about COA or anything else. I'll be here to assist. Stay safe and have a great day.

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