Taxable Service for Customer who provides 1099

As to whether or not the service you provide is taxable, that is a determination your state comptroller makes, check on it.

If the service is taxable, then you have to do the math to determine the amount charged that will allow QB to add the tax and end up with the correct total received.

Yes, using a sales receipt is the correct way to do it.  Be sure to use make deposits and then download banking and match

Ok thank you for the reply, that makes sense.

I have adjusted the rate down so that when tax is applied, the total line up with the deposit imported from my bank. I then matched (categorized) the two on the Banking section of quickbooks.

My only question is in reference to your last statement as I am just getting started here.

I don't need to manually create a deposit correct? Matching the receipt with the deposit pulled from my link bank is enough?

Thanks for coming back, totesthouse.

The sales receipts will only show up in the Match transactions section if you deposit them to the Undeposited Funds account. Let's make sure your sales transactions and ensure a bank account isn't selected. Also, Match means QuickBooks Online (QBO) matched the downloaded transaction with the one you already entered. This links them together so you don't get duplicates. Just ensure the match is correct by following the steps below: 

1. Find a downloaded transaction with the Match option in the Action column.
2. Note the Date, Description, Payee, and amount spent or received.
3. Choose the downloaded transaction to expand the view.
4. Review the Matching records found in QuickBooks. This is the possible matching transaction you already entered in QuickBooks.
5. Choose the link next to each match to get more details.
6. Make sure this is the correct match. In particular, review the Deposit to, Payment method, and Bank account fields on forms for the existing transaction in QuickBooks.
7. If this is the correct match, close the open transaction.
8. Press Match.

To learn more about this one, see the Categorize and match online bank transactions in QuickBooks Online article. Feel free to visit our Banking page for more insights about managing your bank transactions in QuickBooks. 

I'd like to know how you get on after trying the steps, as I want to ensure this is resolved for you. Just reply to this post and I'll get back to you. Take care always.

Thank you. I am still having trouble understanding the Undeposited Funds step, mainly as, somehow, I was able to match my bank deposit (from the data imported from my bank) to the sales receipt without actually making the extra step of created an Undeposited Fund. I am not clear how I did that but it seems it simply matched the amounts as they are the same.

Maybe it would make more sense for me to create an invoice, even though I never send it to the client, and then just match it to the imported bank data once it is paid? 

Hi there, totesthouse.

I can share some insights on how the  Undeposited Funds account works.

You're right. You can match the sales receipts or invoices without depositing them in the Undeposited Funds account. This account is used to hold invoice payments and sales receipts you want to combine before depositing them. This way, QuickBooks always matches your bank records.

Although, you can also directly deposit the sales to your bank account if you don't want to perform the two-step process. To learn more about this topic, you can read this articles:
 

• What’s the Undeposited Funds account?
• Deposit payments into the Undeposited Funds account in QuickBooks Online

Additionally, it's always recommended to use an invoice when your customer agrees to pay you later. For the goods or services paid on the spot, you'll have to use a sales receipt. Doing this process helps ensure that the recorded transactions reflect your real-life business activities.

After that, you can now match the imported/downloaded transaction with the one you've already entered to link them together. 

I also encourage checking out our QuickBooks Reconciliation Workflow to be guided in keeping your accounts balanced and up-to-date.

Feel welcome to visit us again here if you need more help in managing your sales and other business transactions. We've got you covered.