Did you get a notice that your tax rate is changing and you are using custom tax rates in QuickBooks Online? Here's how to update them:
To edit tax rates:
- From the left menu, select Taxes. If you have multiple tax agencies, in the top-left ensure that the correct tax agency is selected.
- In the top right-hand corner next to Add tax, select the Edit Tax drop-down then Edit rates.
- In the tax rate table, choose the rate you want to change and select Edit.
- In the Edit tax rate window, change the rate. You can also change the name if you like.
- Set the Effective date, if required, this will be the date from which the rate change will take effect.
- Choose Save.
- Select On or Off beside the tax rate you want to make active or inactive.
- To confirm your changes select Yes.
What happens when you edit a tax rate
- When you edit a rate, you must set an effective date i.e date from which the new rate must be effective
- The new rate will be available for new transactions entered after the Effective date
- If you create a new transaction dated before the set Effective date, the transaction uses the old rate
- If you don't set an Effective date while editing a rate the earlier rate can no longer be used even for past dated transactions
- Existing transactions that used the earlier rate remain unchanged unless you edit the transaction and specifically select a different sales tax rate.
- The new rate is available for new transactions only
- If you create a new transaction but use dates in the past, the transaction uses the new rate
- After you edit a rate, the earlier rate can no longer be used
- Existing transactions that used the earlier rate remain unchanged unless you edit the transaction and specifically select a different tax rate
- For recurring templates that use the changed component, new transactions created with the template use the new rate. Existing transactions created with the template and the earlier rate remain unchanged
- Reports show the data for both rates (before and after) if there are transactions for both the rates in a particular period
Edit a tax agency name
You can edit your agency name to show correctly on your Taxes page only. If you would like to edit your tax agency's name, here's how:
- From the left menu, select Taxes. Then, choose VAT. In the top-left, select drop-down arrow beside Tax and select the correct agency.
- In the top right-hand corner next to Add tax, select the Edit (name of the tax agency) drop-down.
- Select Edit settings.
- Enter the new name, then select Save.
Note: Editing the Sales Tax Agency's name is possible through the Taxes page. However, the agency name that'll show on your sales forms would still be the old name or the initial name that you've entered. If you would like a different name to show on your sales forms, you'll need to create a new tax agency.