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M
MP11
August 23, 2020
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Sales Tax Payable Balance

  • August 23, 2020
  • 1 reply
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I am looking for some help on sales tax payable and sales tax liability trying to understand if I need to do a JE for these transactions. The way I was instructed to enter sales tax payable was to enter a check for expense allocating expense to sales tax payable and B&O tax, there is nothing I am entering to sales tax liability.  There is no balance in sales tax liability and a balance in sales tax payable. Is there a JE for these type of transactions? 

I am just learning how to do this and want to be sure I am creating and balancing the accounts correctly.

 

Thank you

Best answer by katherinejoyceO

Thanks for coming back for more support, @MP11. I'm here to help you record your taxes to easily monitor and remit them to the appropriate tax collecting agency.

 

First off, make sure you check the tax rates and requirements with your tax agency. Then, let's turn on this feature and set up sales tax items or tax groups. Here's how: 

 

  1. Go to the Edit menu, then select Preferences.
  2. Select Sales Tax in the Preferences window, then go to the Company Preferences tab and click Yes to turn on sales tax.
  3. Set up the sales tax items or sales tax groups for each county, district, city, etc. where you collect sales tax. Then, click Add sales tax item to do this.

 

For more insights on adding the sales tax item/sales tax group, refer to step 4 in this help article: Set up sales tax in QuickBooks Desktop. 

 

To make sure your books are accurate, I'd recommend you consult your accountant or tax professional.

 

Feel free to message again if you have additional questions. We're always delighted to assist. 

1 reply

IamjuViel
IamjuViel
August 23, 2020

Hello, @MP11.

 

I can share some information on how to record your sales tax payable and pay your sales tax liability.

 

Using the Write Checks or Pay Bills feature to pay your sales tax will lead to errors in your bookkeeping and sales tax reports. You can run the Account Quick Report and filter Checks to get removed them more easily.

 

Here are the steps:

  1. Click the List tab at the top menu bar.
  2. Click Chart of Accounts.
  3. Search for the account.
  4. Right-click the account, and click QuickReport.
  5. Choose a date range.
  6. Click Customize Report.
  7. Go to the Filters tab.
  8. Filter Transaction Type.
  9. Below Transaction Type, click the drop-down arrow and select Check.
  10. Click OK.

Once completed, you can follow the steps below in paying your sales tax in QuickBooks.

  1. Go to the Vendors menu.
  2. Choose Sales Tax.
  3. Select to Pay Sales Tax.
  4. On the Pay From Account drop-down, select the checking account you want to use for the tax payments. 
  5. In the Show sales tax due through field, check and make sure the date is correct.
  6. Enter the check number in the Starting Check No. field.
  7. You'd see the following:
    • Sales taxes your company owes
    • The tax agency to which the sales tax is payable.
    • The amount due as of the date in the sales tax due through.
      • If you want to make a partial payment, go to the Amt Paid column then type the amount you intend to pay for each tax item on the list.
      • Select Pay All Tax if you want to make a payment for all the taxes due. 
      • Select Adjust if you need to still need to make an adjustment for a credit, fine, etc.
  8. Put a checkmark on the To be printed box if you need to print or handwrite the checks later.
  9. Select OK.  User-added image

Lastly, if you encounter problems while working on your sales tax, you can check this article: 

Keep in touch with us here in the Community to us know how it works on your end. I'm always here to help you with running your sales tax liability report.

M
MP11Author
August 25, 2020

Thank you for the detailed instructions. I am now working on running the reports. I do have another question is the B&O Tax entered in the sales tax screen or is that a separate entry in Quickbooks? 

 

Thank you

katherinejoyceO
katherinejoyceOAnswer
August 25, 2020

Thanks for coming back for more support, @MP11. I'm here to help you record your taxes to easily monitor and remit them to the appropriate tax collecting agency.

 

First off, make sure you check the tax rates and requirements with your tax agency. Then, let's turn on this feature and set up sales tax items or tax groups. Here's how: 

 

  1. Go to the Edit menu, then select Preferences.
  2. Select Sales Tax in the Preferences window, then go to the Company Preferences tab and click Yes to turn on sales tax.
  3. Set up the sales tax items or sales tax groups for each county, district, city, etc. where you collect sales tax. Then, click Add sales tax item to do this.

 

For more insights on adding the sales tax item/sales tax group, refer to step 4 in this help article: Set up sales tax in QuickBooks Desktop. 

 

To make sure your books are accurate, I'd recommend you consult your accountant or tax professional.

 

Feel free to message again if you have additional questions. We're always delighted to assist. 

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