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Hello, I have an invoice with an underpayment. I wrote it off to my Bad Debt expense account. However, when it comes to sales tax, do I pay the sales tax for the total amount of the invoice or only the tax on what was paid? I am so lost right now and I am hoping someone can help me!
Solved! Go to Solution.
Glad to have you here in the Community, @rbprice.
I'll share some information on how sales tax work for underpaid invoices.
When you write off underpaid invoices, you'll just need to pay the tax on what was paid. However, to properly record this into your QuickBooks account, you'll have to create a Bad Debt (Service item) to reduce the unpaid portion of the sales. Here's how:
Once done, you can create a Credit Memo to put the unpaid portion to the Expense account to record a negative sales tax. Please follow the steps below to create a credit memo:
I'll add this article for more details: Give your customer a credit or refund in QuickBooks Desktop for Windows.
Most importantly, I'd suggest seeking help from your accountant or tax experts to properly handle your sales tax records. They can review your transactions and make sure it's accurate.
Let me know how it goes by leaving a comment below, @rbprice. I want to make sure you're taken care of.
You may also be required to collect taxes for certain goods and services you offer. This article will help you keep an accurate record of these taxes so you can easily monitor and remit them to the appropriate tax collecting agency: Process sales tax adjustment.
Have a great day ahead!
Glad to have you here in the Community, @rbprice.
I'll share some information on how sales tax work for underpaid invoices.
When you write off underpaid invoices, you'll just need to pay the tax on what was paid. However, to properly record this into your QuickBooks account, you'll have to create a Bad Debt (Service item) to reduce the unpaid portion of the sales. Here's how:
Once done, you can create a Credit Memo to put the unpaid portion to the Expense account to record a negative sales tax. Please follow the steps below to create a credit memo:
I'll add this article for more details: Give your customer a credit or refund in QuickBooks Desktop for Windows.
Most importantly, I'd suggest seeking help from your accountant or tax experts to properly handle your sales tax records. They can review your transactions and make sure it's accurate.
Let me know how it goes by leaving a comment below, @rbprice. I want to make sure you're taken care of.
You may also be required to collect taxes for certain goods and services you offer. This article will help you keep an accurate record of these taxes so you can easily monitor and remit them to the appropriate tax collecting agency: Process sales tax adjustment.
Have a great day ahead!
Thank you so much!!
It's our pleasure to assist you, @rbprice.
I'm delighted to hear that my colleague's suggestions solved your problem. Please keep in mind that you're always welcome to ask your questions in the Community. We'd be delighted to assist you.
You can bookmark our QuickBooks Desktop Help Articles for your future reference. This page contains various topics with steps on how to manage your taxes, forms, customer/vendor transactions, and other matters.
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