How to Zero out Negative Tax Amount Due?

Let's zero out the negative tax amount due, @Erss.

To maintain tax adjustments accurate, I suggest using the Adjust Sales Tax Due tool from the Vendors menu.

Let me show you how:

1. From the Vendors menu, select Sales Tax and then choose Adjust Sales Tax Due.
2. In the Sales Tax Adjustment window, enter the following details: adjustment date, sales tax vendor, adjustment account, and other relevant information.
3. In the Adjustment section, you can choose if you need to increase or reduce sales tax then enter the adjustment amount.
4. Then hit OK to save the adjustment.
   

For more information about the steps above, you can refer to this article: Process Sales tax adjustment.

On the other hand, you can do a journal entry to post this to another account and I recommend consulting an accountant near you to keep your books accurate. You may find this thread handy, too, from the help given by one of our QuickBooks Community experts.

Anytime you can post a comment if you have additional questions about adjusting the sales tax amount due. I'll make sure to help you out. Enjoy the rest of the day!

We did that.  That did not zero out the account.  It just added another line with the +/- amount.

Maybe the issue is this.

That We have both a Local Tax, and a State Tax.  Both falls under the Same "vendor" (state tax organization).

In Local, we need to take away amount due, and in state we need to add amount due to zero out.  Does that make sense?

How do we resolve the situation because it is adding a new line?

Hi there, Erss.

We recommend two ways to remove the amounts. Make sure to consult your accounting professional before trying any of these options. 

Option 1: Create a General Journal Entry to write off the amount. 

Option 2: Use Credit Memo to enter a negative adjustment or a decrease in sales tax. 

1. Go to the Customers menu and select Create Credit Memos/Refunds.
2. Select a customer name. Unlike the Sales receipt, the Credit memo requires that you enter a name. If you do not wish to use a real customer, click Add New and create a customer named Accountant Use Only.
3. In the Item column, select the first empty line then choose the sales tax item you want to adjust.
4. In the Amount column, enter the amount of the adjustment then press Tab or Enter.
5. Select OK when you receive the message "Changing the amount of a tax line item may cause your sales tax reports to be incorrect."
6. Repeat steps 3 to 5 for any other sales items to be adjusted.
7. Select the next empty line then select a Discount item.
8. In the Amount column, enter the total amount equal to the adjustment(s) entered in the previous line.
9. In the Tax column, select Tax.
10. Verify that the total amount is $0.00.
11. Click Save & Close. 

Please see the attached articles for more information and step by step process:  

• Write off customer and vendor balances 
• Process sales tax adjustment

 We'll be right here if you have more queries about the process. Have a great day!

How to zero out beginning balance for Sale Tax Payable to zero for the new fiscal year. When I run report to look for sales tax for Jan - March it show larger amount than it is because it include the beginning balance that not begin with zero. how do I fix this?

I'm using quickbook online. 

Thank you.

Hello there, @CK9889.

I can see the urgency of getting your Sales Tax Payable sorted out as soon as possible. One of the possible reasons why the Sales Tax Payable shows a large amount is that there could be some payments that weren't recorded in QuickBooks Online (QBO). 

To ensure that this gets sorted out, let's make sure that you have recorded all sales tax payments in QBO. On the other hand, if you were able to record all of them but still produce the same result, you can create an adjustment to fix the balance. Let me guide you on how:

First, let's set up an account for sales tax adjustment. Here's how:
 

1. In your QBO account, go to the Gear icon, then select Charts of Accounts (Take me there).
2. Click on New.
3. From the Account Type ▼ dropdown, select Income or Expenses.
   • If you need to decrease your sales tax due, set up an income account.
   • If you need to increase your sales tax due, set up an expense account.
4. Select the account’s Detail Type.
   • Use Sales of Product Income for an income account.
   • Use Taxes Paid for an expense account.
5. Name your adjustment account (for example, sales tax due increase).
6. Select Save and Close.

Once done, you can then add an adjustment. Here's how:
 

1. In your QBO account, go to the Taxes tab, then select Sales tax (Take me there).
2. Enter the date range in the Due Date Start and Due Date End ▼ dropdowns, then select Refresh.
3. Find the tax period you need to adjust, then select View return.
4. Click Add an adjustment.
5. Select the reason for the adjustment from the Reason ▼ dropdown menu.
6. Add an adjustment date.
7. Select the account for adjusting sales tax from the Account ▼ dropdown menu.
   • Choose an expense account if you need to increase the tax due.
   • Choose an income account if you need to decrease the tax due.
8. Enter the adjustment amount.
9. Click on Add.

For detailed information, kindly visit: Create or delete a sales tax adjustment in QuickBooks Online.

Moreover, for guidance in the process, I recommend consulting your accountant to ensure that this gets treated accurately.

Additionally, I'll also share this link where you can search for articles that can serve as your reference to guide you manage sales taxes in QuickBooks: Help Articles for Sales Tax in QuickBooks Online.

I'm looking forward to getting this sorted out. Feel free to leave a reply if you require further assistance with sales tax in QuickBooks. The Community team always has your back. Have a good one.