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Level 1

Sales Tax discrepancies

I've inherited a company from an accountant that didn't teach the client how to post sales tax payments.  Their sales tax is screwed up going back years. The current year sales tax liability is $3045 which was paid by creating a bill (not from the pay sales tax menu) and then writing the check so the sales tax payable hasn't been reduced by the payment.

Note, I can run correct reports if I run the sales tax liaiblity for 2019 but the sales tax payable column has a positve 27000+ figure and two different vendors with negative $21000 figures..   Very confusing for client and would like to clear this cumulative sales tax payable balance off the books.  There are multiple journal entries that produced the negative balances going back years.


Any thoughts?

Kristine Mae
QuickBooks Team

Sales Tax discrepancies

Thanks for the detailed information, Jplaisier. It made me understand your concern more.


I can think of one thing. We can create a sales tax adjustment. This helps us keep an accurate record of taxes. Here's how:

  1. Click Vendors.
  2. Go Sales Tax.
  3. Select Adjust Sales Tax Due.
  4. Enter the Adjustment Date, then the Sales Tax Vendor.
  5. Add the Adjustment Account.
  6. In the Adjustment section, select either to increase or decrease the sales tax amount.
  7. Click OK.

Check this article on how to process sales tax adjustment for more information. 


Get back to this thread if you have additional questions. We'll be right here to address them. 

Level 1

Sales Tax discrepancies

Do my adjustments have to be made in the same period as the original journal entries that created this problem?


Level 1

Sales Tax discrepancies

Do my adjustments need to be made in the same period as the prior journal entries that created the issues?


Sales Tax discrepancies

It's good to see you back, jplaisier.


Yes, you're correct. This is to ensure the adjustment would reflect on the liability period. 


If you need tips and related articles in the future,  you can always visit our QuickBooks Community help website.


If there's anything else you need, let me know by adding a comment. I'm here to help. Have a great day!

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