If you own a business and provides services or products, you may have to collect taxes for some of your goods and services. In QuickBooks, it becomes very easy and accurate for you to manage and remit taxes to the appropriate tax collecting agency. In this article, we will be helping you with the process to collect sales tax in QuickBooks Desktop.
This article is a part of series on Sales Tax. In this series, we have covered all the usual workflows in QuickBooks Desktop.
It also helps you complete other sales tax-related tasks.
- Handle cash basis sales tax
- Process sales tax adjustment
- Show multiple sales tax items on an invoice
- Refund sales tax collected from tax exempt customers
- Track sales tax on purchases from vendors
If you face any issue regarding sales tax in QuickBooks Desktop, you can refer to Resolve common sales tax issues.
Once you are done with setting up sales tax in QuickBooks Desktop, you are good to go with creating taxable sales. In QuickBooks the sales tax gets automatically calculated and charges while creating invoices, sales receipts and other sales form.
Understand A Taxable Sales Transaction
QuickBooks Desktop has three different areas where your sales forms are linked with sales tax and they are as follow:
- Item tax code: This code allows you to tack taxable status for a particular item. It automatically sets up depending upon the tax code assigned by you while setting up sale tax.
- Tax item/group: These are the sales tax items or group set up by you while setting up sales tax. This section also shows corresponding tax rate for item or group. It automatically sets up depending upon the tax item or group assigned by you while setting up sale tax.
- Customer tax code: It is used to keep a record of taxable status of a customer. It automatically sets up depending upon the customer tax code assigned by you while setting up sale tax.
QuickBooks itself sums up entire taxable line items (Blueprints worth $100 + Wood Door for $1 500 = $1 600) and multiply it to the sales tax item or group assigned to the customer. Thus, the total tax collected is $124.
Change sales tax for one particular sale
The tax rate can be modified for a particular sale. QuickBooks also allows you to make changes in customer or item tax code a single sales transaction. Example, if a taxable customer purchased items or services for a non-profit organization, the sale won’t fall under the taxable category irrespective of what tax code is assigned to the customer or item. All the modifications done by you are accepted for few sales and you need to make sure that they don’t affect item or customer setup.
Change the item tax code
Go to the Tax section and click on drop-down arrow for available items. Choose appropriate tax code from the drop-down options. To add a new tax code, you need click on Add New. For example, to update the taxable tax code to non-taxable, you need to choose non-taxable sale.
Change the tax item/group
Go to the Tax section and click on drop-down arrow for available tax items/groups. Choose appropriate tax group from the drop-down options. To add a new tax item/group, you need click on Add New.
Change the customer tax code
Go to the Customer Tax Code section and click on drop-down arrow for available customer. Choose appropriate customer tax code from the drop-down options. To add a new tax code, you need click on Add New. You can select Add New if you need to add a new tax code. For example, To update the taxable tax code to non-taxable, you need to choose non-taxable sale.
Still In Confusion About The Process
This article has provided an important piece of information regarding the collection of sales taxes in QuickBooks Desktop. Although, QuickBooks makes setting up and collecting sales tax easy but at the same time, it’s a process that are usually performed by experts. You can face several errors and issues related to sales tax as well. In such situations, you need to get connected with an expert who will you with the process. You can dial our toll-free QuickBooks Support Phone Number +1855-565-6250 to gey instant solution for your issues.