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KylerG
Level 2

Sales Tax Payment Plan

I'm on a payment plan for 12 months of sales tax that was reported but never paid. The state gave me 12 months with 12 equal payments to pay off the balance. I did the math and calculated the federal income tax deductible amount and the penalties which I am manually recording in the Taxes & Licenses register and the Penalties & Settlements register as a split transaction from the bank transaction directly.

 

This approach leaves several months of sales tax liability in the Sales Tax center as never having been paid. Is it possible for me to record adjust these liabilities to $0 or do I need to do some funky payment recording for these months as the payment plan payments are made to get rid of this liability?

Solved
Best answer June 22, 2021

Best Answers
MirriamM
Moderator

Sales Tax Payment Plan

Hello again, @KylerG.

 

In QuickBooks Online (QBO), the option to divide payables in 12 months is not possible since QBO automates the calculation of sales tax payables. It depends on the date of the transaction entered. And the only way to divide the payables is to record the one-time payment and create a journal entry to transfer the payable to a liability account. 

 

In creating a journal entry, I suggest consulting your accountant or accounting professional for guidance and what account receives the debit and credit side of the transaction.

 

To create a journal entry in QuickBooks Online (QBO), here's how:

  1. Click the + New button in the left navigation menu.
  2. Select Journal entry
  3. Fill out the fields to create your journal entry.
  4. Pick Save and new or Save and close.

Keep me posted if you have any additional questions, as I'm always here to help. Take care.

View solution in original post

3 Comments 3
MaryLandT
Moderator

Sales Tax Payment Plan

Yes, you can adjust the sales tax liability to zero it out, KylerG.

 

To do so, you can follow these steps I've outlined below:

 

  1. Go to Taxes, then select sales tax. Check which return is due this month, then select View return.
  2. If you need to file an older return, select the From ▼ drop-down and choose a past month, then Refresh.
  3. Review your sales tax. Make sure everything is correct.
  4. If you need to add an adjustment for things like credits, discounts, or corrections, click + Add an adjustment.
  5. Take note of your gross sales, taxable sales, tax due, and adjustment amount (if you added one).
  6. You’ll need these numbers later when you fill out your sales tax return form.
     

Once done, you can record your tax payment. Here's how:

 

  1. Go to Taxes, then sales tax.
  2. Find the return you just filed, then select View return.
  3. To record your tax payment, Select a filing method. Then select File manually.
  4. Add these payment details:
    • Tax amount
    • Payment date
    • Bank account
  5. Click Record payment.
  6. Your return is now marked as paid, then select Back to sales tax center.

 

If you need detailed information about what you owe, run your sales tax liability report for the same tax period. This is helpful if you want to review your taxable and non-taxable invoices, receipts, and other transactions.

 

Let me know if there are other things you need to help with recording sales taxes in QuickBooks. I'm always around to help you.

KylerG
Level 2

Sales Tax Payment Plan

Thanks but this doesn't answer my question.

MirriamM
Moderator

Sales Tax Payment Plan

Hello again, @KylerG.

 

In QuickBooks Online (QBO), the option to divide payables in 12 months is not possible since QBO automates the calculation of sales tax payables. It depends on the date of the transaction entered. And the only way to divide the payables is to record the one-time payment and create a journal entry to transfer the payable to a liability account. 

 

In creating a journal entry, I suggest consulting your accountant or accounting professional for guidance and what account receives the debit and credit side of the transaction.

 

To create a journal entry in QuickBooks Online (QBO), here's how:

  1. Click the + New button in the left navigation menu.
  2. Select Journal entry
  3. Fill out the fields to create your journal entry.
  4. Pick Save and new or Save and close.

Keep me posted if you have any additional questions, as I'm always here to help. Take care.

View solution in original post

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