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Set up sales tax in QuickBooks Desktop for Mac

Learn how to set up sales tax in QuickBooks Desktop for Mac.

This article is part of a series on Sales Tax. It covers the usual sales tax workflow in QuickBooks Desktop for Mac.

If you encounter problems while working on your sales tax, see Resolve common sales tax issues.

If you sell taxable products or services, QuickBooks can help you calculate and track your sales tax. Then, when it’s time to file your sales taxes, you’ll have everything you need to submit your payment. If you’re using QuickBooks Desktop for Windows, here’s how to set up sales tax.

Note: Before you get started, make sure you check the tax rates and requirements with your tax agency.

How to set up sales tax

  1. Go to the QuickBooks menu, then select Preferences.
  2. Select Sales tax.
  3. Select Customers are charged sales tax.
  4. Select if you pay sales tax Monthly, Quarterly, or Annually.
  5. Choose how sales tax accrues. Select As of invoice date for an Accrual Basis or select Upon receipt of payment for a Cash Basis.
  6. Select the dropdown for Most common sales tax or select Edit to set up sales tax items or groups for each county, district, or city you collect sales tax.

    A sales tax item is used to add and collect sales tax when you make a taxable sale.

    Here’s how to create a new sales tax item:

    1. Go to the QuickBooks menu, then select Preferences.
    2. Select Sales tax.
    3. Select the Most common sales tax dropdown, select New.
    4. From the Tax Name field, add a name for the tax item, like the location the tax is collected.
    5. From the Rate (%) field, enter the tax rate.
    6. From the Tax Agency field, add the name of the tax agency. If the tax agency you use isn’t on the list, you can add them as a vendor.
    7. Select OK.

    Here’s how to edit an existing sales tax item:

    1. Go to the QuickBooks menu, then select Preferences.
    2. Select Sales tax.
    3. Select the Most common sales tax dropdown, select Edit.
    4. Update the sales tax item, then select OK.

    If you have multiple sales tax items that appear on the sale sales tax transaction, you can set up tax groups. When you set up a sales tax group, you can track and report sales taxes individually but they will show as a single line item on your invoices and receipts.

    1. From the Type dropdown, select Sales Tax Group.
    2. In the Group Name/Number field, enter a name for the group.
    3. Enter each sales tax item that you’d like included in the group. If the tax item isn’t set up, you can enter the name then select Set up once you see the prompt.
    4. Select OK.
  7. Mark taxable amounts with “T” when printing. If you want to see which transactions have a taxable item when you print, select the “T” next to taxable items. Each item and customer can be set up as taxable, this makes it so the sales tax is automatically calculated when a transaction is created.
    1. Go to the Lists menu, then select Item List.
    2. Select Item, then either New or Edit Item.
    3. If the item’s taxable, select the Taxable checkbox.
    4. When you’re done, select OK.
      1. Go to the Customers menu, then select Customer Center.
      2. Right-click the customer you need set up as non-exempt, then select Edit Customer:job. If the customer's not set up, select New Customer.
      3. On the Edit customer screen, select Additional Info.
      4. If your customer is taxable, select the Customer is taxable checkbox. If they’re not, leave it clear.

    Select OK.

How to adjust the sales tax amount you owe

When you make sales tax adjustments, money will move into or out of your Sales Tax Liability account. You’ll want to adjust your sales tax liability for things like:

  • A credit for a previous overpayment or an early payment discount given by your sales tax agency.
  • A fine charged by your sales tax agency for a late payment or non-payment the previous tax year.
  • Corrections to sales from a previous period.
  • Rounding differences between QuickBooks and your sales tax forms.
  • Sales tax holiday declared by your agency.

Here’s how to adjust your sales tax due:

  1. Go to the Vendors menu, and select Sales Tax Adjustment.
  2. Enter the adjustment date, sales tax vendor, adjustment account, and any other info.
    1. Use an expense account if you’re making adjustments for penalties and fines or if you’re entering a positive rounding error.
    2. Use an income account if you’re making an adjustment because of a discount/credit or if you’re entering a negative rounding error.
  3. Choose if you need to increase or reduce the sales tax, then enter the adjustment amount.
  4. Select OK.

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