cancel
Showing results for 
Search instead for 
Did you mean: 
MP11
Level 2

Sales Tax Payable Balance

I am looking for some help on sales tax payable and sales tax liability trying to understand if I need to do a JE for these transactions. The way I was instructed to enter sales tax payable was to enter a check for expense allocating expense to sales tax payable and B&O tax, there is nothing I am entering to sales tax liability.  There is no balance in sales tax liability and a balance in sales tax payable. Is there a JE for these type of transactions? 

I am just learning how to do this and want to be sure I am creating and balancing the accounts correctly.

 

Thank you

Solved
Best answer August 24, 2020

Best Answers
katherinejoyceO
QuickBooks Team

Sales Tax Payable Balance

Thanks for coming back for more support, @MP11. I'm here to help you record your taxes to easily monitor and remit them to the appropriate tax collecting agency.

 

First off, make sure you check the tax rates and requirements with your tax agency. Then, let's turn on this feature and set up sales tax items or tax groups. Here's how: 

 

  1. Go to the Edit menu, then select Preferences.
  2. Select Sales Tax in the Preferences window, then go to the Company Preferences tab and click Yes to turn on sales tax.
  3. Set up the sales tax items or sales tax groups for each county, district, city, etc. where you collect sales tax. Then, click Add sales tax item to do this.

 

For more insights on adding the sales tax item/sales tax group, refer to step 4 in this help article: Set up sales tax in QuickBooks Desktop

 

To make sure your books are accurate, I'd recommend you consult your accountant or tax professional.

 

Feel free to message again if you have additional questions. We're always delighted to assist. 

View solution in original post

7 Comments
IamjuViel
QuickBooks Team

Sales Tax Payable Balance

Hello, @MP11.

 

I can share some information on how to record your sales tax payable and pay your sales tax liability.

 

Using the Write Checks or Pay Bills feature to pay your sales tax will lead to errors in your bookkeeping and sales tax reports. You can run the Account Quick Report and filter Checks to get removed them more easily.

 

Here are the steps:

  1. Click the List tab at the top menu bar.
  2. Click Chart of Accounts.
  3. Search for the account.
  4. Right-click the account, and click QuickReport.
  5. Choose a date range.
  6. Click Customize Report.
  7. Go to the Filters tab.
  8. Filter Transaction Type.
  9. Below Transaction Type, click the drop-down arrow and select Check.
  10. Click OK.

Once completed, you can follow the steps below in paying your sales tax in QuickBooks.

  1. Go to the Vendors menu.
  2. Choose Sales Tax.
  3. Select to Pay Sales Tax.
  4. On the Pay From Account drop-down, select the checking account you want to use for the tax payments. 
  5. In the Show sales tax due through field, check and make sure the date is correct.
  6. Enter the check number in the Starting Check No. field.
  7. You'd see the following:
    • Sales taxes your company owes
    • The tax agency to which the sales tax is payable.
    • The amount due as of the date in the sales tax due through.
      • If you want to make a partial payment, go to the Amt Paid column then type the amount you intend to pay for each tax item on the list.
      • Select Pay All Tax if you want to make a payment for all the taxes due. 
      • Select Adjust if you need to still need to make an adjustment for a credit, fine, etc.
  8. Put a checkmark on the To be printed box if you need to print or handwrite the checks later.
  9. Select OK.  User-added image

Lastly, if you encounter problems while working on your sales tax, you can check this article: 

Keep in touch with us here in the Community to us know how it works on your end. I'm always here to help you with running your sales tax liability report.

MP11
Level 2

Sales Tax Payable Balance

Thank you for the detailed instructions. I am now working on running the reports. I do have another question is the B&O Tax entered in the sales tax screen or is that a separate entry in Quickbooks? 

 

Thank you

katherinejoyceO
QuickBooks Team

Sales Tax Payable Balance

Thanks for coming back for more support, @MP11. I'm here to help you record your taxes to easily monitor and remit them to the appropriate tax collecting agency.

 

First off, make sure you check the tax rates and requirements with your tax agency. Then, let's turn on this feature and set up sales tax items or tax groups. Here's how: 

 

  1. Go to the Edit menu, then select Preferences.
  2. Select Sales Tax in the Preferences window, then go to the Company Preferences tab and click Yes to turn on sales tax.
  3. Set up the sales tax items or sales tax groups for each county, district, city, etc. where you collect sales tax. Then, click Add sales tax item to do this.

 

For more insights on adding the sales tax item/sales tax group, refer to step 4 in this help article: Set up sales tax in QuickBooks Desktop

 

To make sure your books are accurate, I'd recommend you consult your accountant or tax professional.

 

Feel free to message again if you have additional questions. We're always delighted to assist. 

View solution in original post

MP11
Level 2

Sales Tax Payable Balance

I have the sales tax set and its capturing sales tax. Am I just added the B&O tax as an item and when I pay monthly through pay sales tax it will be a line item I can add?

Rejeil_O
QuickBooks Team

Sales Tax Payable Balance

Hello there, @MP11.

 

Let me step in and share with you the information after adding the sales tax item in the line item.

 

You can select the sales tax you want to pay by putting a checkmark beside them. Once done, make sure you fill up all the necessary fields in the Pay Sales Tax windows. Then, hit the OK button to confirm the action.

 

You can follow the steps provided by my colleague IamjuViel as your reference in paying your sales tax. Or, you can refer to this article for more detailed information: Pay sales tax in QuickBooks Online.

 

I also added an article in case you need help adjusting your sales tax: Process sales tax adjustment.

 

If you have follow-up questions, please don't hesitate to leave a message in the comment section. I'll be around here in the Community to help. Keep safe, and have a great day.

MP11
Level 2

Sales Tax Payable Balance

I have followed the steps I've come across where the sales tax window shows we paid $626.76 the STLR and what we paid was $1059.44. I've checked the data and its all correct and should reflect what we paid. I looked through all the steps listed on what to check if there are differences and can't find any. The sales tax window is clearly wrong our sales tax for the month was much higher. How do I correct this?

 

Thank you

AlexV
QuickBooks Team

Sales Tax Payable Balance

Hi there, MP11.

 

You'll want to process sales tax adjustment to increase the sales tax amount you paid. 

  1. From the Vendors menu, hover over Sales Tax and select Adjust Sales Tax Due.
  2. Enter the Adjustment Date, Sales Tax Vendor, and Adjustment account.
  3. In the Adjustment section, select Increase Sales Tax By and enter the adjustment amount.
  4. Select OK.

Also,  here's an article for your reference about multiple sales tax items on an invoice. It would also be best to reach to an accountant so they can better guide you regarding sales taxes.

 

I'll be here if you need more help. Stay safe and healthy!

Need to get in touch?

Contact us
Sign in for the best experience
Ask questions, get answers, and join our large community of QuickBooks users.
Sign In / Sign Up