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Level 1

Incorrect sales tax charged when moving from other platform. How can I correct this?

Moving over from using Joist, which has you manually put in sales tax, I realized that I had been charging 10% sales tax on jobs when the rate had, relatively recently, changed to 10.1%.

 

I have 3 invoices that I moved over that were completely paid by the customer through Joist before I realized this mistake; after the payments have been recieved on the Quickbooks invoice it still shows these invoices owing amounts like $2.04 or $9.53 etc.

 

I'd like to just eat these small amounts or fix it somehow, but obviously I still need to pay the full 10.1% of tax so I can't just give a discount or change the tax rate (or can I?) since I got paid for the whole job.

 

How do I correctly go about fixing these for the invoices to show them as completely paid?

Solved
Best answer April 16, 2020

Best Answers
Highlighted
Moderator

Incorrect sales tax charged when moving from other platform. How can I correct this?

Thanks for getting back to us,

 

Since your customer only pays 10% sales tax from the previous accounting software that you've used, what I can think of is to manually create a check to pay the remaining 0.1% on their behalf. However, this will be treated as a company expense. That said, I highly suggest consulting an accounting professional for further advice on how to go about this to ensure your books are accurate for your business.

 

After that, since QuickBooks Online (QBO) automatically calculates the sales tax for you, you'll no longer repeat the process moving forward.

 

Just in case, I'll add these articles for future reference:

 

 

Please let me know if you have any other questions or concerns in the comment section below. I want to make sure everything is taken care of for you. I'm always here to help. Have a great day!

View solution in original post

6 Comments
Highlighted
Moderator

Incorrect sales tax charged when moving from other platform. How can I correct this?

Hello there, Andavin,

 

You'll want to override the amount instead to correct it. Here's how:

  1. Click Sales on the left pane.
  2. Select Customers.
  3. Locate the invoice, and click to open.
  4. Check the total sales tax at the bottom.
  5. Select See the math or the total tax amount. This opens the "Let’s calculate your tax rate" screen where QuickBooks gives you a detailed breakdown of the sales tax.
  6. Click Override this amount.

Check this article for reference: Sales tax in QuickBooks Online.

 

Let me know if you need further assistance.

Highlighted
Level 1

Incorrect sales tax charged when moving from other platform. How can I correct this?

Hi,

 

I'm not sure if either you didn't understand my question or if I'm misunderstanding the situation myself. I accidentally charged the incorrect rate to the customer for sales tax. Is it permissible to simply change the sales tax amount, therefore not paying the full sales tax amount, because I didn't collect the full amount from the customer?

 

I appreciate any insight on this

Highlighted
QuickBooks Team

Incorrect sales tax charged when moving from other platform. How can I correct this?

I'd like to ease your confusion, Andavin.

 

QuickBooks Online automatically calculates the sales tax for you. That's why my colleague lets you override the tax amount so you can change it. Once done, you can receive the invoice payment normally. 

 

I'll share the article about setting up and using automated sales tax in QuickBooks Online, so you'll know how the feature works. 

 

Let us know if you have more questions. You can always get back to this thread. 

Highlighted
Level 1

Incorrect sales tax charged when moving from other platform. How can I correct this?

Hi,

 

Thanks for the replies. However, I don't feel as though my question was understood; let me attempt to explain it differently.

 

Quickbooks automatically calculates the sales tax that I need to charge the customer and then pass on to the state. This amount is, correctly, 10.1%. However, when I was using the previous platform it did not automatically calculate the tax rate and I was under the impress that the tax rate remained at 10%.

 

Unless I'm completely wrong here, my ignorance doesn't allow me to simply not pay the state that extra 0.1% that I did not collect from customers while receiving payments on the other platform and therefore I still owe the full 10.1% sales tax, but did not collect it from the customers.

 

It seems to me that if I just override the amount on the invoice saying the tax rate is 10%, then Quickbooks will, in turn, only have me pay 10% on my sales tax form and I would then be 0.1% short according to the state.

 

So, what I'm wondering is how to go about properly recording that I will still pay the 10.1% while still marking the invoices as paid, but simply pay the 0.1% tax myself rather than collecting it from the customer.

 

If I'm completely wrong in my assumptions here please let me know.

Thanks for the help

Highlighted
Moderator

Incorrect sales tax charged when moving from other platform. How can I correct this?

Thanks for getting back to us,

 

Since your customer only pays 10% sales tax from the previous accounting software that you've used, what I can think of is to manually create a check to pay the remaining 0.1% on their behalf. However, this will be treated as a company expense. That said, I highly suggest consulting an accounting professional for further advice on how to go about this to ensure your books are accurate for your business.

 

After that, since QuickBooks Online (QBO) automatically calculates the sales tax for you, you'll no longer repeat the process moving forward.

 

Just in case, I'll add these articles for future reference:

 

 

Please let me know if you have any other questions or concerns in the comment section below. I want to make sure everything is taken care of for you. I'm always here to help. Have a great day!

View solution in original post

Highlighted
Level 1

Incorrect sales tax charged when moving from other platform. How can I correct this?

Thanks, it seems like this will be the best solution. I will talk to my accountant to see exactly how to go about it, but I don't see any other way either.

 

I appreciate all of the answers

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