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AnneN
Level 2

Record Taxes related to a purchase

I have to record a bill / purchase on which I can see a line dedicated to State and Local Taxes.

 

I have also another bill on which I see a VAT charged at 19%

 

Please, let me know how to record these taxes related to an expense, in QB online. I think that it needs to be done. 

 

Is there any possibility to add some additional lines on an accounting entry, directly ? 

 

Thank you in advance !

Solved
Best answer March 15, 2021

Best Answers
JessT
QuickBooks Team

Record Taxes related to a purchase

Hi AnneN,

 

The tax on your purchases is paid and filed by your vendor, so there is no need to set up or add it to your transactions. Just enter the items you purchased and the total amount you paid. If you really want to track the tax portion, you can add it to your transactions as another item.

 

You can verify this with a tax advisor or accountant to make sure your reports are correct.

 

Let me know if you have other questions in mind.

View solution in original post

9 Comments 9
LieraMarie_A
QuickBooks Team

Record Taxes related to a purchase

You've come to the right place, @AnneN.

May I know where your business is operating? You’ll have to set up first the tax or VAT item for purchases in QuickBooks.

 

Here’s how:

  1. Click Taxes from the left menu.
  2. Select Add tax.
  3. Click Custom tax.
    • Tax name
    • Tax agency name
    • Registration number
    • Start of the current tax period
    • Filing frequency
    • Reporting method

   4. Select This tax is collected on purchases.

   5. Click Save.

 

Once done, you can use this item when creating an expense or a bill transaction. 

 

I've added some articles here containing more information about Sales GST/VAT:

 

 Stay around should you have other questions. I'm always here to help. Have a great day!

AnneN
Level 2

Record Taxes related to a purchase

Hello,

 

Thanks a lot for your reply ! 

 

We are operating in the US.

 

Please confirm whether - in this case - it's always relevant to set up taxes on our Profile as you explained in your message.

 

If yes, regarding other state taxes (but we don't know which ones - it's just not specified on the invoice) - whether it needs to be done as well. 

 

 

JessT
QuickBooks Team

Record Taxes related to a purchase

Hi AnneN,

 

The tax on your purchases is paid and filed by your vendor, so there is no need to set up or add it to your transactions. Just enter the items you purchased and the total amount you paid. If you really want to track the tax portion, you can add it to your transactions as another item.

 

You can verify this with a tax advisor or accountant to make sure your reports are correct.

 

Let me know if you have other questions in mind.

AnneN
Level 2

Record Taxes related to a purchase

Hello Jess,

 

Thanks a lot for your help !

AnneN
Level 2

Record Taxes related to a purchase

Hi Jess,

 

Thanks a lot for your reply regarding VAT ! I accepted it as a solution.

 

May I ask you also - 

 

We see a 911 Service Fee on a vendor (phone) bill 

 

Do we need to add a separate accounting entry for this fee ?

 

JonpriL
Moderator

Record Taxes related to a purchase

Hello @AnneN,

 

Yes, I'd also agree to create an accounting entry for the service fee of your vendor's bill. You can enter it as an additional line item on the bill when you recording it.

 

In the same manner, here's an article you can read to learn more about how you can create and pay bills: Enter bills and record bill payments in QuickBooks Online.

 

On top of that, I've also included this reference for a compilation of articles you can use while working with us: Expenses and vendors for QuickBooks Online.

 

If there's anything else that I can help you with, please let me know in the comments below. I'll be here to lend a hand.

AnneN
Level 2

Record Taxes related to a purchase

Hi Jonpril,

 

Thanks a lot for your message and sorry for the delay in my reply.

 

I would like to ask you - what is an account (in the Chart of Accounts) to be created that will allow reporting on the 911Fee ?  Just before putting the addition line on a bill.

 

Thanks in advance for your help !

 

Julian05
Level 1

Record Taxes related to a purchase

How can I register the tax related to a purchase invoice? the only place I see anything related to taxes is in configuration and only allows me to see taxes related to sales. In other words, if I have an invoice for $100 in products and $13 in tax. How do I register that tax?

Giovann_G
Moderator

Record Taxes related to a purchase

Thanks for joining the thread, Julian05.

 

I can guide you in setting up your sales tax.

 

You have the option to add tax related to purchase when creating an invoice. Please ensure that your sales tax is already set up.

 

Here's how to set up sales tax:

 

  1. Go to Taxes, then Sales Tax
  2. Select Set up sales tax.
  3. If you already set up your business info in Settings, you should see your physical business address here. If you haven’t done that yet, you can add your business address.
  4. Review your address and then click Next.

 

Here's how to add the tax to an invoice:

 

  1. Click the + New icon.
  2. Select Invoice.
  3. Fill in all the information.
  4. In the Select tax rate dropdown, choose Add rate under the Custom Rate.
  5. Enter your desire name, tax agency, and rate. Then hit Save.
  6. Checkmark the Tax box to calculate.
  7. Click Save and close.

 

For your reference, you can read through this guide for the detailed steps: Set up where you collect sales tax in QuickBooks Online.

 

Also, adding this handy material for more insights: Set up and use automated sales tax in QuickBooks Online

 

Reply to this post if you have further questions about taxes. I'll be around to help you.

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