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Level 3

How to make sales tax adjustment *increase* for round up by state?

We need to increase our sales tax by a small amount to adjust for rounding and need to know which adjustment account to use for Increase sales Tax By

We are using the Sales Tax Adjustment feature in MAC QB 2016. Do we just choose Sales Tax Payable since it's an increase to sales tax due/payable or do we choose something elsse like Other Expenses?

Also, the amount was split between two localities but does that make a difference since it's all just one main Sales Tax Payable account and the localities are sub accounts?

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Best answer 12-10-2018

Accepted Solutions
Level 15

If the amount to be paid is less than the QB collected am...

If the amount to be paid is less than the QB collected amount, you got a discount in other words, use an income account

if the amount is higher, then use an expense account

View solution in original post

22 Comments
Level 15

If the amount to be paid is less than the QB collected am...

If the amount to be paid is less than the QB collected amount, you got a discount in other words, use an income account

if the amount is higher, then use an expense account

View solution in original post

Level 3

Thanks Rustler. We are trying to figure out if in this ca...

Thanks Rustler. We are trying to figure out if in this case since the State shows us owing a slight bit more if that expense account should be "sales tax payable" which is the standard account for paying owed sales tax, or if we should put it to an "other expense" account.

Thanks!
Level 15

create an expense account called sales tax paid sales tax...

create an expense account called sales tax paid
sales tax payable is not an expense, it is a debt you owe - so no you do not use it as the adjusting account.  When you adjust up or down, that adjustment hits the adjustment account AND sales tax payable
Level 3

Thank you!

Thank you!
Level 15

You're Welcome

You're Welcome
Level 1

Confused, sorry, I'm new at this.   First you said create...

Confused, sorry, I'm new at this.   First you said create an expense account, then you said sales tax payable is not an expense?  Can you walk me through?
Level 15

Antoinette What you collect from customer is not an expen...

Antoinette
What you collect from customer is not an expense or income
If you have to pay extra when you file sales tax - that extra is an expense since you have not collected it
Level 1

Re: create an expense account called sales tax paid sales tax...

Some months, I get a Vendor Discount from the State that I'm paying sales tax too.  I may also have to Pay Use Tax and adjust a few cents for rounding when finalizing the month's sales tax.  What is the best way to document this in QBO?  I'm currently just doing the "SUM/DIFFERENCE" adjustment and noting it all on my paperwork.  Is there a way to make multiple payment recordings in QBO for the state each month that would document each of these?

Level 1

Re: If the amount to be paid is less than the QB collected am...

I keep trying to do this.  The amount that QB is showing is just pennies more then what the state is calculating.   When I try to make an adjustment due to rounding error, I keep getting the message "The value is out of range, please put in a positive value"   I tried that and it doubled my problem.  I was $.03 off now I'm $.06 off.  

 

Help!

QuickBooks Team

Re: If the amount to be paid is less than the QB collected am...

Hello there, cjbondy.

 

Allow me to step in and provide some information about making sales tax adjustment in QuickBooks Desktop.

 

You do not use sales tax payable for the adjustment account. If you're making adjustment because you received a discount/credit or if you are entering a negative rounding error, you choose Income account. If it's for the adjustment because you need to add penalties and fines or if you are entering a positive rounding error.

 

Here's how you adjust sales tax due:

  1. From the Vendors menu, click Sales Tax.
  2. Choose Adjust Sales Tax Due.
  3. In the Sales Tax Adjustment window, enter the necessary information.
  4. In the Adjustment section, choose if you need to increase or reduce sales tax then enter the adjustment amount.
  5. In the Memo field, enter any additional note.
  6. Click OK.

For more information about the process sales tax adjustment, you can check out this article.

 

Let me know if you have any other questions about this. I'd be happy to help clarify things out.

Level 1

Re: If the amount to be paid is less than the QB collected am...

How would you correct this same problem in QBO?

Moderator

Re: If the amount to be paid is less than the QB collected am...

It's good to see you here, tjmand4,

 

Let me help share information on how to make Sales tax adjustment in QuickBooks Online. 

 

Here's what you'll need to do:

  1. Click the Taxes menu from the left menu.
  2. Select the agency you're recording the payment.
  3. Click Record Tax Payment.
  4. Fill all the necessary information.
  5. Mark the Make Adjustment box, then enter information about the adjustment.
  6. Select Record Tax Payment.

Here's a great resource that you can check on for more detailed steps: Manage Sales Tax Payment.

 

However, if you're using the Automated Sales Tax feature, here's how to make Sales tax adjustment:

  1. Click the Taxes menu from the left menu.
  2. Select the agency you're paying.
  3. Click View return.
  4. Click the + Add an adjustment link.
  5. Enter the reason for the adjustment, the account and the amount.
  6. Once done, select Record payment.

You can check out this article fro more detailed steps: Set up and use Automated Sales Tax.

 

If there's anything else you need help with in adjusting Sales tax, please feel free to reach back out. Have a great day!

Level 1

Re: If the amount to be paid is less than the QB collected am...

How do I change the class of the adjustment?

QuickBooks Team

Re: If the amount to be paid is less than the QB collected am...

Hello there, Kmount.

 

If you're using QuickBooks Online, we're unable to add or change a class to a sales tax adjustment.

 

I suggest sending feedback directly to our product engineers. This will help us know the features our customers want. You can do that by clicking the Gear icon, then choosing Feedback

 

Though, if you're using the Desktop version, you can change the class. Here's how:

  1. Click Lists.
  2. Go to Chart of Accounts.
  3. Look for the adjustment account, then double click to open.
  4. In the Account QuickReport window, double click on the sales tax adjustment.
  5. Double click again on the sales tax journal. 
  6. Change the class, then click Save & Close

Reach out to us if you have other sales tax concerns. Have a good one! 

Level 1

Re: If the amount to be paid is less than the QB collected am...

I clearly understand all of the comments, but have a related question.

 

When I do this, QB says that it applies the adjustment to all the sales tax districts.  How can I apply it to the district which I need to adjust (I did find our error down to the invoice)?  Or, is it not necessary to do so?

 

In CA, we input how much we pay to each district so it would be good to be able to adjust to a particular district so that my adjusted Sales Tax Liability Report will match what I input on our state tax payment website.

 

Did that make sense?!?

QuickBooks Team

Re: If the amount to be paid is less than the QB collected am...

Hi there, SoBizzy.

 

At the moment we can only do the adjustment on the return, which you say will affect other districts. You can reach out to our phone or chat team for options to calculate your tax. You can reach them through these steps:

  1. Click on Help and choose Contact us.
  2. Enter short detail of your concern and click on Let's talk.
  3. Choose from Chat or Get a callback.

If there's anything that I can help, feel free to reply below.

Level 1

Re: If the amount to be paid is less than the QB collected am...

Will do, thank you for the quick response.  Where can I go to make this a suggestion for future software versions?  I think it is really important for us to be able to adjust QB so that it matches reporting to our tax authority.

QuickBooks Team

Re: If the amount to be paid is less than the QB collected am...

Hello there, SoBizzy.

 

Product suggestions are used by our engineers in considering for their future updates. The more suggestions of this feature, the more chances that this will be included on their updates.

 

I'd make sure to send this suggestion for you. Our engineers can look into it.

 

We'd keep working to improve our product and services. Let me know if you need anything else.

Level 3

Re: You're Welcome

Hello!

I have a question....

I want to Adjust Sales Tax Due, need to decrease Sales Tax Due. I created an Income account and now wondering for the amount- to use positive number? Quickbooks Online doesn’t allows me to use negative number there... 

QuickBooks Team

Re: You're Welcome

Yes, you'll use a positive number, ZG10.

 

Our system will automatically calculate the adjustment depending on the reason. If you'll use Credit or Prior prepayments, it will deduct from the tax due. While, if you'll use Pre payments and Other (penalties, interest, rounding errors), it will add from the tax due. Check my screenshot below so you'll know how it looks like.

 

 

I'll share to you the article about creating or deleting a sales tax adjustment for more information. 

 

If anything comes up, let us know. We're right here for you. 

 

 

Level 1

What if Sales Tax Payable is the account I need to adjust?

I have a new Point of Sale that is not currently connected to quickbooks. Is there a way to adjust the Sales Tax Payable manually so that I won't have to enter each transaction manually. 

Moderator

Re: What if Sales Tax Payable is the account I need to adjust?

Hello, phil4550.

 

Thanks for joining the thread and posting your question here in the Community space.

 

If you'd want to manually enter sales tax in your QuickBooks account for you not to be able to manually enter transactions, then this is currently unavailable. You can import transactions with sales tax for you to be able to file and generate a report for it. Since QuickBooks POS cannot prepare Sales Tax Return for that.

 

If you wish to have sales tax prepared by QuickBooks, then you'll need to enter transactions since sales tax will be automatically generated.

 

In case you have other questions about QuickBooks Point Of Sales (POS), here's a great resource that you can read: QuickBooks Desktop Point of Sale User Guide.

 

You're always welcome to visit the Community again if you have any other questions. I'd be more than happy to help. Take care.

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