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lynnphtr1
December 16, 2020
Question

HST Tax Code for Refund by Cheque/EMT

  • December 16, 2020
  • 1 reply
  • 0 views

Hi,

 

I started using Tax code for my client, and tax centre for month end and year end. Now I have problems with tax code centre when it records some of the transaction in wrong tax code and I could not change it even though I aware it.

My client wrote cheques/ sent EMT to refund customer. He use a different CRM system so he does not use invoices/sales function on QBO. When I record the refund, QBO seems like recognize the refund as an expenses and give it HST purchase tax code, then affect my line 103 and 106. There is no option for me to change from HST purchase to HST sales. Now I cannot figure out how much HST client actually own, because line 103 and 106 mix up. Please advise. 

1 reply

PatriciaT
PatriciaT
December 16, 2020

Hi lynnphtr1,

 

It sounds like you're taking advantage of the Online Banking feature in QuickBooks Online to automatically download and categorize your transactions. Making sure you have the correct tax code on these transactions ensures accurate sales tax reporting. I'll be happy to assist you with this.

 

After you connect a bank or credit card account in the program, QuickBooks automatically download your recent transactions in your For review tab. Transactions in this tab are displayed as a mirror image to those in your bank statements, with amounts under the Spent column for expenses and Received columns for sales. If the transaction you're currently working with is under the Spent column, that would explain why QuickBooks recognizes it as an Expense and provides sales tax codes that match the transaction type. There isn't any way to switch a transaction from the Spent section to the Received, as these are coming directly from the bank statement they origin from. In situations like these, you can exclude the transaction and keep the manual entry you initially did with the appropriate tax code. To exclude transactions from your For review tab, simply check off the box beside each transaction and select Exclude. Here's an article for your reference: Categorize and match online bank transactions in QuickBooks Online

 

For previous transactions added through Online Banking with the wrong tax code, you can locate them in your Categorized tab and Undo to bring them back in the For review tab to exclude if needed.

 

I hope this helps! Don't hesitate to reach back if you have any other questions.

 

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