You may be required to collect taxes for certain goods and services you offer. QuickBooks Desktop helps you keep an accurate record of these taxes so you can easily monitor and remit them to the appropriate tax collecting agency.
This article is part of a series on Sales Tax. It covers the usual sales tax workflow in QuickBooks Desktop. It also helps you complete other sales tax-related tasks.
If you encounter problems while working on your sales tax, see Resolve common sales tax issues. |
Adjust the sales tax amount you owe
When you make sales tax adjustments, you move money into or out of your Sales Tax Liability account. You adjust your sales tax liability for reasons like:
- A credit for previous over payment or early payment discount given by your sales tax agency.
- A fine charged to you by your tax agency for late or non-payment in the previous tax year.
- Corrections to sales in a previous period.
- Rounding differences between QuickBooks and your sales tax forms.
- Sales tax holiday declared by your agency.
To adjust your sales tax due:
- Go to the Vendors menu and select Sales Tax then Adjust Sales Tax Due.
- In the Sales Tax Adjustment window:
- Enter the adjustment date, sales tax vendor, adjustment account and other relevant information.
Note: Do NOT use sales tax payable for the adjustment account. Choose an Income account if you are making the adjustment because you received a discount/credit or if you are entering a negative rounding error. Choose an Expense account if you are making the adjustment because you need to add penalties and fines or if you are entering a positive rounding error. - In the Adjustment section, choose if you need to increase or reduce sales tax then enter the adjustment amount.
- (Optional) In the Memo field, enter any additional note.
- Select OK.
- Enter the adjustment date, sales tax vendor, adjustment account and other relevant information.
Adjust amounts for sales tax items
You need to make adjustments for specific sales tax items if there are several types of sales tax payable to the same tax vendor. Adjusting the sales tax items allows the allocated amount to match the reporting as well.
Positive adjustment
To enter a positive adjustment or an increase in sales tax, use a Sales Receipt.
- Go to the Customers menu and select Enter Sales Receipts.
- Leave the Customer field blank.
- Select the Tax drop-down and choose a 0% sales tax item.
Note: If none exists, select Add New and create one. - In the Item column, select the first empty line then select the sales tax item you want to adjust.
- In the Amount column, enter the amount of the adjustment then press Tab or Enter.
- Select OK when you receive the message "Changing the amount of a tax line item may cause your sales tax reports to be incorrect."
- Repeat steps 4 to 6 for any other sales items to be adjusted.
- Select Save & Close.
Negative adjustment
To enter a negative adjustment or a decrease in sales tax, use a Credit Memo.
- Go to the Customers menu and select Create Credit Memos/Refunds.
- Select a customer name. Unlike the Sales receipt, the Credit memo requires that you enter a name. If you do not wish to use a real customer, click Add New and create a customer named Accountant Use Only.
- In the Item column, select the first empty line then choose the sales tax item you want to adjust.
- In the Amount column, enter the amount of the adjustment then press Tab or Enter.
- Select OK when you receive the message "Changing the amount of a tax line item may cause your sales tax reports to be incorrect."
- Repeat steps 3 to 5 for any other sales items to be adjusted.
- Select the next empty line then select a Discount item.
- In the Amount column, enter the total amount equal to the adjustment(s) entered in the previous line.
- In the Tax column, select Tax.
- Verify that the total amount is $0.00.
- Click Save & Close.