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Join now2 questions...
1. I have a negative amount in my sales tax liability report that the previous accounting girl overpaid on the taxes that were due. How do I clear this out properly, so the sales tax liability report shows the correct amount due?
2. Also, we are going to be writing off bad debt from prior periods so we will be paying less taxes than the sales tax liability report shows due. So how would I best clear this amount out so the taxes payable are $0 and don't carry that amount due over to the next month?
Thanks for reaching out to the Community, Caccounting5. I appreciate your detailed information.
To clear negative amounts from sales tax overpayments, you can create a deposit and use the expense account you used when paying your taxes.
Here's how:
I'd also recommend working with an accounting professional if you have any questions while creating your deposit. In the event you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.
Afterwards, you can run the Sales Tax Liability report. This will show a summary of your sales taxes collected and owed to agencies. It can be ran by going to the Reports menu, choosing Vendors & Payable, then selecting Sales Tax Liability.
In regard to writing off bad debt, you can refer to our Write off bad debt article for detailed information on how the process should be handled in QuickBooks.
I'll be here to help if there's any additional questions. Have a lovely Friday!
Thank you for responding so quickly...
Make a deposit into what bank account? This will show up on my bank account with no actual monies going into it won't it?
I'll be glad to guide you on which account to deposit the sales tax overpayment in QuickBooks Desktop (QBDT), @Caccounting5.
When addressing a sales tax overpayment in QBDT, you need to deposit the amount into the same bank account used when paying your sales tax. Yes, you're right. While this action doesn't involve actual funds entering your account, it serves a vital purpose in clearing the overpayment from your financial records and ensuring accurate record-keeping.
Moreover, you may be required to make sales tax adjustments for reasons like corrections to sales in a previous period. You can refer to this article for the detailed process: Process sales tax adjustment.
We'll always keep an eye out if you have additional concerns about handling sales tax overpayment in QBDT. We'll ensure to get back to you promptly to assist you. Stay safe and have a great weekend.
How does that deposit clear up when I go to reconcile my bank account at month end?
Hi there. Let me help you clarify your query about clearing up your deposit, Caccounting5.
If you received a refund for the overpayment amount into the bank account you used to pay the taxes, you'll match it to the created deposit in your QBDT before reconciling to clear the deposit.
Reconciling ensures your QuickBooks records correspond to your actual bank account balance. A deposit that hasn't cleared the bank yet will show as uncleared in QuickBooks. For further details, visit this article: Reconcile an account in QuickBooks Desktop.
If you don't see any refund in your bank statement, I suggest consulting your accountant for accurate recordkeeping and assistance managing your sales tax data.
Visit this reference if you experience issues upon reconciling your accounts: Fix issues when reconciling in QuickBooks Desktop.
Furthermore, you can also create rules to optimize your categorization management in your bank feed.
I'm all ears and ready to assist with handling bank deposits or reconciliation. Just leave your reply below, and I'll be right with you. The Community space is open 24/7.
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