I am trying to clean up some old sales tax issues and have found that over the years, they had identified numerous accounts as "sales tax payable" accounts, so on the balance sheet, there are 5 sales tax payable accounts, 2 of which have not had any activity in years which I will clear with a je and make them inactive.
There are however 3 accounts where sales tax is still being charged to from invoices. I do not know what is driving which sales tax transaction to which "sales tax payable" account as there is nothing on the item or customer level to direct it to one or the other?
Could it simply be randomly sending the sales tax to one of the 3 accounts?
My thought was to make 2 of the 3 inactive, create a journal entry to the one account I am trying to retain and then hopefully with only 1 active "sales tax payable" account all of the sales tax will be directed to that account?
Anyone have similar experience?
Thanks for posting in QuickBooks Community.
QuickBooks Online creates a separate tax payable account for each agency. In order to determine which sales tax transactions are going to the sales tax payable, I suggest running the report for the account through the Chart of Accounts. Let me help walk you through on how.
1. Go to the Accounting menu.
2. Select Chart of Accounts.
3. Click the arrow beside View Register.
4. Click Run Report.
For more guidance on how to manage sales tax, please read this article: Sales Tax in QuickBooks Online
For future reference incase you want to learn more about sales tax liability report, please read this article.
Reach out to me directly if you have any questions and concerns. Please know that I'm here to lend a helping hand. Wishing you the best.
Thank you, but there is only one agency.
The issue is on the g/l, there are 6 "active" general ledger accounts identified as "Sales Tax Payable", I think that previously each new bookkeeper set up a new account in order to avoid reconciling the older mess, but never deactivated the old account so now there are 5
25500 current year activity sales tax on some invoices is going here.
25502 no current year activity
25503 current year activity sales tax on some invoices is going here.
25504 current year activity sales tax on some invoices is going here.
25505 no current year activity
25506 no current year activity.
So again, what I am trying to figure out is why sales tax on some invoices goes to 25500, some goes to 25503 and some goes to 25504.
Once I get it charging to only one account, I can then create a journal entry to move the remaining balances, but I cannot determine why it is going to multiple accounts.
Hi there, averyl.
For the multiple tax payable accounts created by the previous bookkeeper, you can inactivate them in QuickBooks Online. This way, you can only retain the Sales Tax Payable account you need when creating a transaction.
But first, let's open per invoice transaction to see if the correct sales tax code was applied. If not, then manually change to the correct one.
Once done, you can follow the steps below on how to inactivate the Sales Tax Payable account:
Then, repeat the steps above to inactive other accounts.
For more details about deleting an account, you can refer to this article: How to delete an account or restore a deleted account.
I've found a helpful article for more details about managing sales tax in your Online account: Sales tax in QuickBooks Online.
Feel free to reply to this thread if you have more questions in sales tax.