How to set-up tax-inclusive prices?

Thanks for the reply! Looking for option same as screenshot posted. Thanks!

Please can you show me how to set-up sales tax and purchases tax inclusive on QB 2016 desktop version.

Hi,

Thank you for your prompt response.

Yes my second question is how to setup tax on purchases and vendor as well. I've set up sales tax but when i post testing Invoice the amount of tax is excluded. How to set the tax to be include on the total amount record.

Please can you help me on this.

Thanks,

Maki

Hi again, Maki01.

Thanks for your response and for clarifying your concern. Let me make sure you can set up sales tax on purchases and include sales tax when creating invoice.

QuickBooks is not designed to track sales tax automatically on non-sales transactions like bills, checks, and purchase orders. You'd need to manually track them and I'm happy to show you how.

To track sales tax on purchases as an expense (not to be paid later):

1. Create an Expense account.

     a. Go to Company menu, then click Chart of Accounts.

     b. Right click anywhere, then New.

     c. Select Expense, then click Continue on the Choose Account Type window

     d. Enter the Account Name and other details then Save & Close.

2. When creating a transaction (like a bill) in which you will be tracking sales tax, enter the bill as usual but go to the Expenses tab instead and select the expense account created in step 1.

3. Enter the amount of sales tax in the Amount column (this will need to be calculated manually).

4. Check if the total if its correct after clicking Recalculate.

To track sales tax on purchases as a liability (to be paid later):

1. Create an Other Current Liability account.

     a.Go to  Company menu  again, then click Chart of Accounts.

     b. Right click anywhere and select New.

     c. In the Choose Account Type window, click the Other Account Types drop-down then select Other Current Liability.

     d. Click Continue.

     e. Enter the Account Name and other details then click Save & Close.

2. When creating a transaction (like a bill) in which you will be tracking sales tax, enter the bill as usual, but go to the Expenses tab instead and select the liability account created in step 1.

3. Enter the amount of sales tax in the Amount column (this will need to be calculated manually).

4. Check if the total if its correct after clicking Recalculate.

5. When it is time to pay this sales tax, you can see the liability that has been accrued by looking at the Chart of Accounts.

6. This amount can be paid with a regular check.

For more information, you can check out this article: Track sales tax on purchases from vendors.

On the other hand, make sure to select the sales tax that you setup when creating test invoices so that it'll be added to the total amount. I've attached a screenshot for your reference.

That should help you fixed right up. Feel free to leave a comment if you have additional questions about sales tax. I'm here to help.

Thanks for this. But how about QuickBooks POS2013? How would I set up a tax inclusive price?  For instance, if the price is 5$ that's what prints on the receipt including the tax (*rate for example at 16%)

Any help is highly appreciated. Thanks. 

Hello there, Xhrs.

For now, we're unable to set up a tax inclusive price in QuickBooks Point of Sale. As a workaround, you can create a different item to represent your sales tax, then the price should be lesser. Or, you can discount the price by a standard rate. 

I will surely submit this idea to our management team. They will pass this along to our software engineers for review.

Let us know if you have other concerns. Have a good day! 

Quickbooks is no able to this "inclusive" pricing.  I have clients here in the US and here is how I deal with it.  There is a set formula to compute the tax amount included in the total.

the total $ collected divided by 1.0 then sales tax rate:  Example

total collected $100, which includes a total 8% sales tax:  100 divided by 1.0800 = 92.59

to proof the total take the 92.59 times 8% is $7.41;  92.59+7.41 is 100.

Sorry but NO WAY QB will this itself, you will do this on EVERY inv/sales receipt but it does work.

Thanks for joining this thread, @Roger Zeng.

The VAT calculation in QuickBooks depends on the selected preference. To include the 5% tax on the $10 invoice amount, you'll have to select the Inclusive of Tax setting. After that, identify and choose the VAT for the item.

That should give the correct amounts, @Roger Zeng. For future help with VAT, please check the following links:

• Set up and edit VAT settings, VAT codes and VAT rates

• VAT Overview

• Common VAT Codes

• Submit a VAT return in QuickBooks

Let me know if you have follow-up questions or concerns. I'm still here to help you further. Have a good one.

Does QUICKBOOKS Desktop PREMIER have this feature as well? 

Does this feature available with QUICKBOOKS DESKTOP Premiere as well? Cant seem to find it.

Hello there, @tax included.

Welcome to the Community. If you're using the US version of QuickBooks Desktop, it shows as Sales Tax on the Preferences section.

To enable the feature, here's how:

1. Click the Edit tab at the top menu bar and select Preferences.
2. Choose Sales Tax on the left panel.
3. Choose Yes.
4. Hit OK. 

If you're using a different version, follow these steps instead:

1. Click Edit located at the top.
2. Choose Preferences, then the preferences pop-up window appears.
3. On the left panel, click VAT.
4. Click the Company Preferences tab, and click Yes next to Do you charge VAT?.
5. Click the Add VAT Item button to open a new window.
6. Enter the VAT information and click OK.

For future reference, visit the following articles about sales tax and VAT:

• Set up sales tax in QuickBooks Desktop.

• QuickBooks Desktop VAT e-filing & Making Tax Digital.

If there’s anything else I can help you with, click the Reply button and post a comment. I’ll be right here ready to help you. Have a good one.

Hi thanks, got this already.

Hoping to find the feature where i can input a TAX-included rate so QB can compute sales and tax automatically.

We sell service at 100 (tax included) sales is 89.29 (100/1.12) and tax is 10.71

I tried using tax-exclusive rate as base in my invoice. However decimal points are problematic when computing with qty. Total receipt amount do not match so i have to manually adjust items to match actual amount. 

Help please. 

How can i activate this one? Allow tax inclusive sales option

Hi,

The QB screenshot you posted is from the QB online version. Yes, I was able to use the "Inclusive of Tax" feature and it helped a lot with invoicing since that's how sales tax is compute in the Philippines. I recently installed QB Desktop 2020. My problem is I cannot encode my sales data at the moment because sales tax is computed as an "add on"  to the price of products. I hope you can help me find the "Inclusive of Tax" feature or its equivalent in QB Desktop 2020. Thanks

Hi there, @LeoP.

The Inclusive of Tax option is currently unavailable in QuickBooks Desktop (QBDT). And please know that recording sales tax in QBDT depends on how you set them up.

You can follow the details steps provided by my colleague FritzF above to turn on the option and set up sales tax items. For your reference, feel free to check out this article for more guidance: Set up sales tax in QuickBooks Desktop.

You might also want to read this article to learn how to handle sales tax in QuickBooks Desktop: Handle cash basis sales tax.

Keep in touch if you need more help with your sales tax, or if there's anything else I can do for you. I always have your back and am always happy to help. Have a great day!

Thank you so much for this formula. You just saved me from months of cracking my brain on a way to go about it.

I use Quickbooks Desktop so what I did was change price level with the format you stated.

we use 7.5% VAT here so I did a new price level of all prices to be divided by 1.0750 and then I set the tax to 7.5%.

@ChristyYale 

Thank you so much for this formula. You just saved me from months of cracking my brain on a way to go about it.

I use Quickbooks Desktop so what I did was change price level with the format you stated.

we use 7.5% VAT here so I did a new price level of all prices to be divided by 1.0750 and then I set the tax to 7.5%.

amounts coming out nicely😁

Hi, You can go to edit, preferences, sales tax, company preferences put check mark in- allow tax inclusive prices to be entered. When creating bill or invoice there is a box at top where you can remove check mark or put in depending if you want tax inclusive or not.

This is on the desktop version.

I am trying to make my QuickBooks custom template show amount inclusive of tax but it's always showing exclusive. On my setting I have had the inclusive of tax option as default but during printing the print out is showing exclusive of tax. 

Hi there, @Nimoh_mwangi.

I appreciate you for setting up the default tax rate selection to Inclusive of Tax in your Accounts and Settings. Let me provide additional insights on how we can fix this printing issue.

When you create a transaction in QuickBooks Online (QBO), taxes are automatically added based on the taxable status of the item used in each line. Let's consider changing them directly from your products and services. Here's how:

1. Go to the Gear icon, then select Products and services.
2. Choose an item used on your invoices.
3. Under the Action column, click Edit.
4. Place a checkmark on the Inclusive of tax box.
5. Under the Tax dropdown, select the correct tax category.
6. Select Save and close.
   

After that, create a transaction, and please make sure to select the correct custom template you've created.

Additionally, feel free to check out this reference with the resources needed so you can keep up with the latest updates mandated by your tax agency in QBO: Taxes in QuickBooks Online.

Please let me know by commenting below if you have any other tax questions. I'd be more than happy to answer any questions you may have. Stay safe!

There is no checkmark for Inclusive of tax box.

Thanks for joining inn, @EZ5. We can troubleshoot to get the Inclusive of tax checked when you set up sales tax for your transactions.

Please know that QBO uses cache to make your browsing experience faster, but when it gets full of temporary files, it'll start behaving erratically.

To begin, I'd recommend logging into your QBO account in an incognito or private window. Use the keyboard shortcut keys listed below to access it in your preferred browser:

• Google Chrome, press CTRL+ Shift+N
• Mozilla Firefox: press CTRL+Shift+P
• Internet Explorer: Press CTRL+Shift+P
• Safari: press Command+Shift+N

Check to see if you can select the Inclusive of tax and mark as checked. If that works, start clearing your browser's cache to ensure that it functions properly. If private browsing does not work, switch to another supported web browser for the best and most secure browsing and loading experience.

Let me know if you have more concerns. I'll be there to guide you again.