Sander & Associates, P.A

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Using QuickBooks to Report Sales Taxes

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QuickBooks helps automate your sales tax tracking so you can keep accurate records about the sales taxes you collect and pay. But this is one of the very complicated areas in QuickBooks and causes a lot of headaches for users. You must follow the rules and regulations for collecting and paying sales tax in your tax district (city, county, state), set up and track taxable and non-taxable sales using sales tax codes, use sales tax items and rates to charge sales tax.

So what do you need to do to get started? You will need to:

  1. Set up your sales tax items with rates for each county you do business in.
  2. Set up the tax agencies to pay.
  3. Assign taxable or non-taxable status to your items and customers.
  4. Set up a payment schedule.
  5. Enter an opening balance for your sales tax payable account If you have sales tax that you currently owe to your tax agency.
  6. Charge sales tax when you make a sale.
  7. Pay your tax agency when it’s due.

While the process seems straight forward, even the slightest error in setting this up results in reports that do not match sales tax liability computations within QuickBooks. This is not for the faint of heart and can be VERY frustrating! We seriously recommend getting support from Intuit or your CPA!


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