I appreciate the details you've provided and your efforts in figuring this out, @AjayK76. Allow me to share with you some information and answer your queries on how to handle your sales tax payment in QuickBooks Online (QBO).
Please know that QuickBooks Online (QBO) does not allow you to adjust the settings for automated sales tax to include prior periods. This means that any historical transactions outside of the range after 12/31/2022 cannot be modified within the automated system.
Given this situation, entering a manual journal entry is indeed a suitable approach. It’s advisable to consult with your accountant to ensure these entries are accurately recorded for the prior period, as this will help maintain clarity in your financial statements.
- Click the +New button, the Journal entry.
- Set the Date to when the payment occurred.
- Select an ACCOUNT for the DEBITS and CREDITS amount.
- Optionally, you can include a Memo to clarify the purpose of the entry.
- Once done, hit Save and close.
Moreover, for the correct account category affected by the debit and credit, consult your accountant. They can ensure proper classification and understand the entries' implications on your financial statements to record your sales tax liabilities correctly.
If you don't currently have an accountant, you can visit our Proadvisor website to find one.
Furthermore, to avoid displaying negative values in your journal entries, you may need to make certain adjustments to your sales tax records, and your accountant can guide you in this regard.
I'm adding this article to generate a report that displays your non-taxable or taxable sales in QuickBooks: Sales Tax Liability report.
I'm always here, as well as the Community folks to help if you have other questions about managing sales tax and payments in QBO. You can reply to this thread or start a new one to let me know.
