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Level 1

QB is not calculating sales tax payable correctly

I ran my sales tax liability report.  I entered the taxable sales into my state's system and the sales tax payable does not match the report.  QB is inflating the number.  My total taxable sales were $39,218 with a tax rate of 8.25%.  QB is showing that the payable is $3,311.  The correct payable should be $3,235.  I checked all of the sales and I checked the sales tax percentage, and they are correct.  How do I get QB to calculate it correctly? 

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Best answer December 10, 2018

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Level 15

QB is not calculating sales tax payable correctly

check the basis of the sales tax liability report, if the state wants you to report sales tax based upon cash basis then the report also needs to be on cash basis

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9 Comments
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Level 15

QB is not calculating sales tax payable correctly

check the basis of the sales tax liability report, if the state wants you to report sales tax based upon cash basis then the report also needs to be on cash basis

View solution in original post

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Anonymous
Not applicable

QB is not calculating sales tax payable correctly

So how do I check if its cash or accrual basis? and how would I change it?
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Level 8

QB is not calculating sales tax payable correctly

From the options icon at the top of the report.
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Level 1

QB is not calculating sales tax payable correctly

It did not help me, my difference is only 0.09ct but mathematically QB does not calculate 3.5% off the amount right. Any thoughts on that?
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Level 1

QB is not calculating sales tax payable correctly

The discrepancy is likely due to a rounding difference on several individual invoices.
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Level 1

QB is not calculating sales tax payable correctly

I see the same thing happening on an individual invoice level.

For example, I sell an item for $22.00
There is a state sales tax of 4.75% - $1.045

There is a county tax of 2.25% - $0.0495

Together, they total $1.54

QB Desktop PRO says it "will collect tax for these items as a group, but will report on each one individually."  4.75% + 2.25% = 7%.   $22.00 x 7% = $1.54, yet the tax applied to the invoice is $1.55, telling me that Quickbooks is improperly rounding the individual taxes before summing them: $1.045 > $1.05 & $0.0495 > $0.050, summing to $1.55.

How can I have the calculation done properly?

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QuickBooks Team

QB is not calculating sales tax payable correctly

Thanks for joining the thread, @RayB.

 

In QuickBooks Desktop, the decimal points will automatically round off to the nearest hundredth. If you encounter problems while working on your sales tax, you can check this article: Resolve common sales tax issues.

 

You can also check this article in case you need to create a sales tax adjustment in the future: Process sales tax adjustment.

 

Please drop a comment below if you have additional questions about sales tax. I'm always here to help you out.

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Level 1

QB is not calculating sales tax payable correctly

Yes, it's obviously a rounding issue - each individual tax rounding to the hundredth point before being summed.  Is there a way to override that so it rounds to the thousandth?  Seems to me that ought to be a user-defined option to account specifically for cases like these.

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QuickBooks Team

QB is not calculating sales tax payable correctly

Hello there, @ RayB.

 

I appreciate you for sharing your thoughts about the rounding off behavior of sales tax to some invoice amounts. In the meantime, you can process sales tax adjustments to correct the tax amounts. 

 

Having the automatic rounding off in QuickBooks is definitely a handy feature when added to the program. This would save time, so you won't manually adjust any taxes derived from the invoices.

 

In the meantime, you can follow the suggestion to adjust the taxes manually to ensure accurate tracking of your quarterly returns. Check out the links below based on the program you're using: Process sales tax adjustment.

 

If you have any other questions or concerns, please drop a comment below. Take care.

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