If you own a business, you may have to collect taxes for various goods and services that you provide. With QuickBooks, you can easily maintain a record of such taxes so that they can easily be managed to the correct tax collecting agency.

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.

If you face any issue regarding sales tax in QuickBooks Desktop, you can refer to Resolve common sales tax issues.

Adjust The Sales Tax Amount You Owe

While making sales tax adjustments, you keep moving your money in or out of your Sales Tax Liability account. You may have to adjust your sales tax liability for following reasons:

  • The sales tax agency is offering a credit for your old over payment or early payment discount.
  • You were charged fine for late or non-payment in previous tax year.
  • You want make changes to sales in a previous period.
  • QuickBooks and sales tax forms are having differences.
  • Your tax agency declared a sales tax holiday.

You can adjust your sales tax due through following steps:

  • From the Vendors menu, go to Sales Tax > Adjust Sales tax Due.
  • In the Sales Tax Adjustment window:
    • Set adjustment date, sales tax vendor, adjustment account and other required information. Note: Make sure that the adjustment account is not payable for the sales tax. You have to choose an Income account to make changes because the credit/discount was received or if you enter a negative rounding error. You need to select an Expense account to make adjustments because you have to include penalties and fines or when you enter a positive rounding error.
    • Go to the Adjustment section and select if you want add or reduce sales tax and then provide the adjust amount.
    • (Optional) In the Memo field, enter any additional note.
    • Click on OK.

Adjust Amounts For Sales Tax Items

If you have multiple sales tax item types of sales tax payable to one tax vendor, you have to make modifications for a particular sales tax item. Making adjustments to the sales tax items helps you in sharing the amount that allows you to match reports as well.

Positive adjustment

Enter a positive adjustment or an increase in sales tax by using a Sales Receipt.

  • From the Customers menu, choose Enter Sales Receipts.
  • Don’t enter any information in the Customer
  • From the Tax drop-down options, select a 0% sales tax item. Note: If there is no tax item like that, click on Add New and set up one.
  • From the Item section, choose the first blank like and then click on the sales tax item you wish to adjust.
  • From the Amount section, provide an amount and then press the Tab or Enter key from your keyboard.
  • When you get the “Changing the amount of a tax line item may cause your sales tax reports to be incorrect” message on your screen, click on OK.
  • Perform above 3 steps for any kind of sales items that you want to adjust.
  • Select Save & Close to save changes.

Negative adjustment

Use a Credit Memo to enter a negative adjustment or a decrease in sales tax.

  • From the Customers menu, choose Create Credit Memos/Refunds.
  • Choose a customer name from the list. In the Credit memo you have to enter a name which is not compulsory in the sales receipt. You can click on Add New and then create a customer with name Accountant Use Only in case you don’t want to use a real customer for this process.
  • From the Item section, select the first blank field and then select the sales tax item you will be adjusting.
  • From the Amount section, provide an amount and then press the Tab or Enter key from your keyboard.
  • When you get the “Changing the amount of a tax line item may cause your sales tax reports to be incorrect” message on your screen, click on OK.
  • Perform above 3 steps for any kind of sales items that you want to adjust.
  • Choose the next blank field and click on a Discount
  • Select Amount field and provide total amount equal to adjustments done to the last line.
  • Select Tax from the Tax column and make sure that the total amount is $0.00.
  • Select Save & Close to save changes.

Need More Help?

Hopefully, this article was helpful for you and you were able to process sales tax adjustments in QuickBooks Desktop. It is clear that this process can be a bit complex for you if you are not very much familiar with the QuickBooks environment. Usually, this process is performed by the accountants but because QuickBooks offers very convenient accounting services. However, there are chances that you may face issues while performing the steps and you may fall into errors. In such situations, you will have to connect with our QuickBooks assistance team by dialing our toll-free QuickBooks Support Phone Number +1855-565-6250 and get instant solutions for QuickBooks.

Process Sales Tax Adjustment In QuickBooks

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