I am an interior designer, so I am often purchasing products on behalf of my clients for which I invoice them. I do not have a sales tax ID at this point, so I need to include that on my invoices, but was unsure if I could list the sales tax as a separate line item because I do not have a sales tax ID. I have been rolling it into the cost of the items so far, but have been keeping track of the sales tax separately just in case. I do plan to get a sales tax ID for this year to make things simpler, but I am not sure what to do about 2021's expenses and income re: sales tax.
I understand that you need help with the sales tax. Let me show you how you can track it.
First, it's best to seek some advice from your accountant if you need to include the sales tax since you don't have a Tax ID. They'll be able to further assist in handling it.
You can manually track the sales tax in QuickBooks Desktop. You'll need to create a sales tax item and use it on your sales transactions but you'll need a liability account first to track the sales tax.
Go to the Lists menu and select Chart of Accounts.
Select New from the Accounts menu. Under Other Account Types drop-down, select Other Current Liability.
Click Continue, enter the details needed, then select Save & Close.
Once done, go back to the Lists menu, select Item List, then tap New from the Item menu. Choose Service as the Type, select the liability account you created in the Account menu. Enter the details required, then click OK to save it.
You can now add it as another line item to your sales transactions.
You need to get a state tax ID number, like, yesterday. In most states, it takes just a couple of minutes to register online and you will be all set to collect sales and submit tax.
You should get in touch with a CPA. There can be hefty penalties for late payment of sales tax collected and it's entirely possible that, even though you rolled it in to the cost of the items, because you did not state sales tax as a separate line item on invoices, you technically did not collect it. A CPA with a good understanding of sales & use tax can help.