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I feel dumb for asking this because it involves a small amount.
Every 6 months I get an updated tax table from Avalara for my state (NM) and add that tax table into my woocommerce for my e-commerce sales for my state. (I have very few in-state sales). Then if I have a sale within my state (NM) I add or edit the tax rate for that region in QB Desktop when I add the sales in QB.
Every quarter I pay my quarterly sales tax. This quarter I discovered a discrepancy between what I charged the customer and with what the state shows I own.
It turns out that for 2 customers, Avalara had the old tax rate, and as a result, I overcharged these 2 customers for a very small amount. I am talking about an overcharge of $.06 for one customer and $.05 for another.
I am not sure what the process is to correct this.
I know that I could either refund the customers for this amount or pay the additional $.11 to the state.
I do not know what corrective entries I need to do for either scenario within QuickBooks.
Hopefully, someone can give me a bit of help for this ridiculously small amount. But I figure it could help someone who has overcharged taxes for a much larger amount.
Mark
I appreciate the details you shared with us, Themark. Let me guide you through the necessary procedure to correct the overcharged amount.
You can give the money back to your customer by creating a credit memo or refund check. Here's how:
After that, select how you want to handle the credit:
Option 1: Retain as an available credit.
You'll see the receive payments window.
Option 2: Give a refund.
Option 3: Apply a credit to an invoice.
Moving forward, you'll also need to make sure you select the right tax rates when creating an invoice. This avoids charging your customers incorrectly for the tax owed on sales. Kindly check the snapshot below for reference:
If you're all good with this, browse this extra article regarding invoice personalization: Create custom email templates in QuickBooks Desktop.
You can always comment if you need more help with this matter or QuickBooks in general. The Community is available 24/7. Stay safe.
Is the $0.11 sitting in a liability account right now? If so, the easiest thing to do is to move that small amount to income. To do that, create a journal entry - debit the sales tax liability account, and credit your sales/income/revenue account.
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