QuickBooks Online – How to Manage SALES TAX – set up, collect, report and pay sales tax
From the Dashboard > Taxes
Set up products and services and make it taxable > Gear > Lists > Products and Services > New > select ‘Is taxable” box.
I’ve not seen a single article from QuickBooks Help related to this subject on how to record Sales Tax refund check in QuickBooks Online. Most of the answers found don’t work or whoever answered the questions does not fully understand how Sales Tax Center is so limited to making any credit/refund adjustments. It’s not clear this functionality is even available in QBO.
What I found as a workaround is to create a Sales Receipt in QBO. Ths assumes negative balance is already shown in Sales Tax Center. In other words, you’re expecting this refund from the Tax Agency.
These are the steps to follow in creating a Sales Receipt:
For Customer field, create a new one (example zSales Tax Adjustment) or leave it blank still works.
Select deposit to bank account.
Select same Products/Services items, one as a taxable item and another one non-taxable item.
With taxable sales item, it should compute sales tax refund amount at the bottom. In this example shown in the screenshot below, taxable sales amount is $21,750, the tax rate is 8% and received $1,740 refund from Tax Agency.
What Small Businesses Need to Know About Sales Tax and Shipping
From the article: For small businesses selling goods online to remote customers, shipping is an integral part of doing business. And, some states tax shipping costs just like they tax the purchase price for a product sold. But, then again … some states don’t. If you want to get your sales taxes right and avoid non-compliance penalties, you need to know when sales taxes on shipping applies. …
Deposit field on Invoice is below the total field. It does not compute sales tax on deposit (acts more like pre-payment) field in QBO. If you run the Sales Tax Liability report from the Sales Tax Center (View sales tax liability report under Related Tasks at the far right side). Just click the tax amount. It will take you to the Transaction Report. You can run this report on a cash basis, you will not see sales tax amount on that deposit or the taxable amount on that invoice total. Of course, on an accrual basis, you will see sales tax amount on the whole taxable sales invoice amount.
In this example, refer to invoice #15-00334 with $100 deposit. No tax amount on a cash basis. Only tax amount on an accrual basis. That is the way it’s supposed to be.
From the blue navigation bar on the left > select Sales Tax tab > select “Record Tax Payment” blue button > New “Record Sales Tax Payment” screen will open > “Print a check” checkbox is located right below Notes field > select Checkbox > select “Record Payment and Print Check” blue button
Now, sales tax check in queue to be printed
From the Create (+) sign > select Print Checks
Follow other selections to preview and print check
QuickBooks Online: Where do I find the amount of sales taxes due
In order to get total sales and taxable sales with sales tax collected, you will need to run a “Sales by Customer Detail” report. This stand-alone report will not give you all the information you need to file the Sales Tax Return. You will need to further customize it to work-around.
To do this, you will to run a “Sales By Customer Detail” report, customize it and add “tax amount” and taxable amount” columns from selecting “Change Columns.
These are the necessary steps, you will need to take.
From the blue navigation bar on the left
Select “Go to report” (magnifying glass), type Sales by Customer Detail
Select “Sales by Customer Detail” from drop-down selector
Change Transaction Date as needed
Select “Customize” blue button (upper left)
Select “Change Columns” under Rows/Columns
Add Tax Amount (refers to tax collected)
Add Taxable Amount (refers to taxable sales)
Add Tax Name (if needed)
Select Remove button and remove unnecessary columns (optional)
Click OK button
Click Run Report
This will give Total Sales and Total Taxable Sales. Subtract these two columns in order to get Non-Taxable Sales.
Recommended: Also click “Save Customizations” button to make this as customized report for future use.