creating a new tax code

Hi SwissMrs

From the menu on the left, go to Taxes then Manage Sales Tax in the upper right of that screen.

From there you should be able to configure the tax authority for the appropriate province that will create the applicable tax codes for you.

Also note that when entering expenses you have two options on the transaction for when you've specified the tax code; either 'including taxes' or 'excluding taxes' so you don't need a separate rate.

Hello SwissMrs,

It's awesome that you and your client are now using QuickBooks Online to manage their books. The program is designed for simplicity, and @LeithG has you off to a great start with how you can go about managing sales tax in the program. I just wanted to take a moment to add some additional resources that you can use for working with these codes and their calculations in the program.

As LeithG mentions, QuickBooks Online gives you the option to set up sales tax codes for provinces and territories, and you also have the option to set up custom tax codes or group tax codes as needed. When you work with the forms in the program, there's a column for the sales tax code to be selected and, as LeithG mentions as well, there's a drop-down to choose whether the amount you're entering is inclusive or exclusive of tax. This is found just above the rightmost column of the line items and the program will automatically calculate your amounts based on the choice selected. Here's an example of what that would look like, using your $40 amount.

You can even set the amounts to be inclusive or exclusive as default in the account settings if you'd like. Here are those steps.

1. Select the Gear icon.
2. Choose Account and settings.
3. Click Advanced.
4. Click the Accounting sub-section to edit.
5. Choose from the Default tax rate selection drop-down menu.
6. Click Save.

Next time you or your client create a transaction, the program will use your selection as the default, however, you'll always have the option to change it as you'd like on the transaction itself.

For setting up the default provincial and territorial tax codes, QuickBooks comes equipped with the setup you need for sales and purchases, and the program understands which to use when you choose a sales tax code on a transaction. The one instance where you'd have to be mindful of purchase or sales portion of the code being used is on special transactions like journal entries,

If you ever need to set up a custom tax code, the process takes into consideration how the code will be used and you can set it up as needed along the way. Here are a few articles that are helpful when it comes to working with sales tax in QuickBooks Online.

• Set up and use sales tax in QuickBooks Online

• How to set up a new sales tax code

• File sales tax

I hope this has helped clarify how to get going with sales tax in QuickBooks Online. Don't hesitate to ask more questions if you have them.