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arkvalleyinfo
May 12, 2021
Question

How do I record a sales tax payment when no money was actually paid, but instead a credit was used to pay the sales tax?

  • May 12, 2021
  • 1 reply
  • 0 views
If I record the amount as paid, then my bank registry is off because no money actually went out, but if I record no money paid since a credit was used, then the balance remains in the sales tax center.

    1 reply

    LieraMarie_A
    LieraMarie_A
    May 12, 2021

    I'm here to help apply that credit to your sales tax, @arkvalleyinfo.

     

    You can add a tax adjustment for the credit. You can select an income account, such as "Other Income." Let's first create the account for the adjustment. 

     

    Here's how: 

    1. Go to Accounting from the left menu.
    2. Select Chart of Accounts then hit New.
    3. Choose Income from the Account Type drop-down. 
    4. Pick the account’s Detail Type.
    5. Name your adjustment account.
    6. Click Save and Close.

     

    After that, let's go to the Sales Tax section to add an adjustment. Let me show you how.

     

    1. Go to Taxes from the left menu, then select the Sales Tax tab.
    2. Locate the tax period you need to adjust and hit View return.
    3. Click Add an adjustment.
    4. Select Credit.
    5. Choose the Account for adjusting sales tax, then enter the amount.
    6. Click Add.
    7. Then, select record payment.

     

    For complete directions, check out this article: Create Or Delete A Sales Tax Adjustment. 

     

    Once done, run your Sales Tax Liability report to review taxes you owe and why you owe them. Just go to the Reports or Taxes menu to complete this task. 

     

    I've also added some pages about handling tax rates and other relevant topics:

     

    I'm always here if you need any more help getting the balance data your business needs.

    D
    dLearned
    July 28, 2021

    I have a similar issue, but have an actual credit note.

    We received a notification that a previous years' amendment resulted in a significant credit.  This credit is more than enough to pay a month's taxes and then some.  The credit was added as a vendor credit, and applied to some penalties assessed, but there is a balance.  I want to record the payment in the sales tax center, but the adjustment is from a vendor credit, not an income account.    Do I have to do as above and JE to offset the income and the vendor credit?

    C
    ChristieAnn 11
    July 28, 2021

    Hi there, dLearned.

     

    Welcome back to the thread and thank you for joining the thread. I appreciate you for sharing detailed information about your concern. I'll ensure to present further details about recording or adjusting sales tax payments.

     

    Once you received a tax credit, discount, or fine, you can adjust the sales tax you owe. This way you don’t have to worry about making corrections when it’s time to file. With this, even the adjustment or credit is from a vendor credit, you can follow the steps provided above on how to record the payment in the sales tax center as a tax adjustment. 

     

    Then, you have the authority to choose what specific account to use in recording sales tax adjustments to offset the vendor credit that was created. Please keep in mind that creating a journal entry in QuickBooks Online to offset the income and the vendor credit is not necessary. However, it's best to consult an accountant for guidance with posting accounts.

     

    You can click this article to view information on how to record, adjust and delete sales tax payments in the sales tax Center: Manage sales tax payments in QuickBooks Online.

     

    Please refer to this article to see details on how QuickBooks Online automatically calculates sales tax when you make a sale: Learn how QuickBooks Online calculates sales tax.

     

    Please let me know if there's anything else I can do for you! Wishing you the best of luck with you and your company. Have a great day.

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