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Denise-Cranford
Level 1

How to manually enter sales tax accrued in desktop

I work for a CPA firm and now using QB Desktop to manage financials for bookkeeping clients.  I keep running into this issue:

I need to enter sales tax payments (Liability Check) but do not want to show a huge negative on my balance sheet.

How can I manually enter sales tax into QB Desktop and offset it with a liability payment without showing a negative on my balance sheet or by creating a journal entry and hit expense on my PL?  Is creating a customer invoice with sales tax my only option?

2 Comments
ReyJohn_D
Moderator

How to manually enter sales tax accrued in desktop

I can share another way on how to handle sales taxes in QuickBooks Desktop, @Denise-Cranford.

 

You can start off by creating sales tax items, and then pay them using the Pay Sales Tax function. This way, you can prevent negative balances on your balance sheet. This is because using other methods of paying them such as the Write Checks or Pay Bills feature can lead to errors in your bookkeeping and sales tax reports. 

 

Also, a negative balance on your Balance Sheet report can be caused by your source account (an Accounts Receivable account) and the target account (the balance sheet account- e.g. your bank account) not balancing. I recommend consulting fellow accountants or bookkeepers to ask for their advice as they may have encountered the same case as yours.

 

To learn more on how to create sales tax items, please refer to this article: Set up sales tax items in QuickBooks Desktop. Once done, you can now use the Pay Sales Tax function to pay your sales tax liabilities. For more details about this, please check out this article: Pay Sales Tax.

 

You can also pull up some sales tax reports to keep track of all your payable and the payments that go with them. Please read through this article for more insights: Review sales tax reports.

 

Then, you may want to customize them to personalize the details and formats you wish. You also have the option to memorize them to save their customization settings for quick access in the future.

 

Feel free to leave a comment below if you've got more questions or any QuickBooks concerns. Have a great day.

BigRedConsulting
Community Champion

How to manually enter sales tax accrued in desktop

If you're not using sales in QB to accumulate sales tax liability,  then there's no need to use the sales tax feature at all.

 

Instead, record a regular check and use whatever account you used to accrue the tax you owe in the first place.

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