QuickBooks provides its users with a useful feature that according to the tax authorities can easily adjust their sales tax. In this guide, you’ll learn everything related to “adjust sales tax in QuickBooks” so that, you can easily report your sales tax without any issues.
The collected sales tax is the net amount of tax collected on behalf of the government from consumers during sales. It is very important to comply with local and non-state tax agencies’ sales tax legislation for all forms of companies. The business owner needs to track taxable and non-taxable revenue separately.
- 1 Sales Tax Adjustment in QuickBooks
- 2 Add Sales Tax Adjustment in QuickBooks Accounting
- 3 Delete Sales Tax Adjustment
- 4 Adjust Sales Tax in QuickBooks Desktop
- 5 Adjusting the Sales Tax in QuickBooks Desktop
- 6 Steps to Adjust Sales Tax Payable in QuickBooks
- 7 Get solutions to all of your accounting and bookkeeping problems with industry leading experts
- 8 FAQ’s
Sales Tax Adjustment in QuickBooks
If you use QuickBooks’ automatic sales tax, then the sales tax changes in QuickBooks are easy to add or remove. If you earn a tax credit, discount, or fine using the automated sales tax feature, you can easily adjust your sales tax. Let’s start exploring the easy process to Adjust Sales Tax Payable in QuickBooks.
Add Sales Tax Adjustment in QuickBooks Accounting
Here are the steps involved under add sales tax adjustment:
Step 1: Create an account for sales tax adjustment
- Resolve an expense account when you need to raise the due sales tax
- On the other side, create an income account where the sales tax needs to be minimized
- It is beneficial to establish a suitable account
- In the upper right corner, go to the gear icon
- And now, from the account drop-down menu, revenue or expenditures
- Income Account: Select the same if you want to decrease your sales tax
- Expense Account: Select the same if you wish to increase your sales tax
- hit the details
- Then, if you want to use the income account, click on product income sales
- Tap the pay taxes option if you would like to use an expense account
- Name the account such as tax changes for sales
- Pick save and close after reviewing.
Step 2: Add Adjustments
- Go to Taxes and then click on the sales tax tab from the navigation bar
- Then pick the tax period you wish to adjust
- and then click on the return view
- Pick Add the adjustment as well as the explanation for the adjustment
- After that when you want to make the adjustment and then choose the account
- After the adjustment is submitted, pick an option to add.
Delete Sales Tax Adjustment
If the adjusted tax is incorrect or incorrectly applied, QuickBooks gives you a different option to delete the sales tax adjustment:
- Go to the top-right gear icon and then click the Chart of Account
- Here is the income or expense account that you wish to delete the sales tax adjustment from
- After that, pick the report you are running, and then press the delete that you wish to delete
- At last, press the delete button and confirm the same.
Adjust Sales Tax in QuickBooks Desktop
When you adjust the sales tax, you transfer money from and to the Sales Tax Liability account in the QuickBooks Desktop. It is therefore critical that you know when to change the sales tax payable on QuickBooks Desktop and how to adjust the same.
Here are the reasons why you need to adjust the sales tax payable in QB Desktop:
- When you have been given some form of discount by the Sales Tax Agency.
- Where you are owed a fine by the tax authorities due to late or non-payment of sales tax
- If during the previous tax period, you would like to make a correction
- When QuickBooks and sales tax forms don’t match.
Adjusting the Sales Tax in QuickBooks Desktop
- Choose an option for the vendor and then pick the sales tax
- You can then click on the Sales Tax Due Change button
- A new window will open for Sales Tax Change
- Enter the sales tax vendor and adjustment account in the adjustment date category in this browser
- If you want to raise or decrease the sales tax, select it, and enter the number of amounts
- You should write sales tax adjustments for reference within the memo
- Finally, click OK after reviewing the complete information.
Steps to Adjust Sales Tax Payable in QuickBooks
- Login to your QuickBooks accounts and go to your dashboard.
- Click on the chart of accounts tab from the list menu.
- Click on the edits tab and select the new accounts button.
- From the Other account types, click Other current assets.
- In the name field, enter the name as you like. Here for the sake of this example we will name it as Sales tax adjustments.
- Click close to close the chart of accounts.
- Now from the vendors menu, navigate to “Adjust sales tax due” from Sales tax menu. Now Change the adjusted date to the date you would want to record the transaction.
- Select the tax vendor you want tax to be adjusted against. From the menu provided choose the Sales Tax Adjustment account you earlier created.
- Type the desired amount in the text box provided.
- Now click on the COA accounts to click on the sales tax adjustment account. Refresh the menu bar and you will now see then amount reflected in the account.
We hope this information helps you to understand how to Adjust the Sales Tax Payable in QuickBooks and how to set up sales tax. You can face several issues while using or performing the steps.
If you are not able to understand any point in this guide or you are having some issues while performing the process then you can get the QuickBooks ProAdvisor Support team by dialing a Tool-Free helpdesk number. You can also drop an email or do a live chat with dedicated professionals.
Get solutions to all of your accounting and bookkeeping problems with industry leading experts
Que: How to fix Print an Invoice if the Sales Tax Feature is turned off?
This error occurs when the invoice is damaged and you need to recreate an invoice template. Here’s how you can create a new template:
● Select Templates from the Lists menu
● Choose the Templates using the drop-down menu within the Templates Windows
● Select the New button
● After that, select the template type and then hit Ok
● Assign the name of the template and then save the customization.
Que: How do you Add a Description to your Sales Tax item?
● To start with select the menu and the Item List from the Lists.
● Double-click an object that does not appear on the printed invoices for Sales Tax.
● Enter Sales Tax or the Sales Tax Item definition in the Description field as you want it to appear on the Invoice when it is printed.
● At last, choose OK.
Que: What can be Possible Reasons due to Which you need to Adjust the Sales Tax Amount that you owe?
Here is the list of possible reasons due to which you need to adjust the sales tax amount that you owe:
● A credit issued by your sales tax provider for a prior overpayment or early payment discount.
● A fine that your tax office owes you for delay or non-payment in the preceding tax year.
● Sales corrections during the previous era.
● Rounding discrepancies between QuickBooks and your forms of sales tax.
● Sales tax holiday that your agency has declared.