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FabianaT
February 19, 2019
Question

How to record prepayment of sales tax using the new automated sales tax feature?

  • February 19, 2019
  • 3 replies
  • 0 views

We recently received a letter from CDTFA that we are now required to file 2 prepayments prior to our quarterly sales tax return.  The new automated feature does not allow me to make prepayments, it assumes that I am filing a return.  Where do I post this prepayment on my balance sheet? Should I simply post to the sales tax liability associated with QBO automated sales tax feature?  Will the system recognized that a prepayment has been made? Any help will be appreciated.

QBO support, if you are reading this post, please make an upgrade to have an option to make prepayments directly from the sales tax tab.

Thank you!

    3 replies

    Kristine Mae
    Kristine Mae
    February 19, 2019

    I can show you how to post the prepayment, FabianaT.

     

    You'll have to create an adjustment.

     

    Here's how:

    1. Click Taxes, then choose Sales Tax.
    2. Click View return.
    3. Click + Add an adjustment.
    4. Under Reason, choose Pre payments.
    5. Choose an account, then enter the amount.
    6. Click Add, then click Select filing method.
    7. Choose the filing method.
    8. Choose the Payment date and Bank account, then click Record payment.

    I've attached a screenshot for your reference.

     

    Let us know if you need more help. Have a good one! 

    F
    FabianaTAuthor
    February 24, 2019

    This would work but I cannot "View Return" because is greyed, out "Accruing"...Since I file Quarterly, it will not let me file return until April and I need to make pre payments for Jan and Feb. 

    J
    Joyce_P
    February 25, 2019

    We can click the View return button when it's time to file the quarterly taxes, FabianaT.

     

    Let's wait for the quarterly tax filing for us to be able to click the View return button and enter an adjustment for the prepayments. To do it, please refer to the steps which my colleague @Kristine Mae provided.

     

    You can get back to me if you need more help. Have a good one!

    L
    lienpeter
    September 14, 2021

    I was able to change the filing frequency to monthly to record the prepayment and then change it back to quarterly.  This does not appear to have any impact on prior reports, etc.

     

     

    6
    624
    September 28, 2021

    This is how I handled it, not sure if the report will be correct.

    go to Sales Tax Center -

    Change the due date start to July (the beginning of the Quarter) and the due date end to September.  Then California will be accessible.  Click on view return, then select "Make Payment".

    B
    bclark21
    June 16, 2023

    I have the same issue. Read my post here: https://quickbooks.intuit.com/learn-support/en-us/taxes/how-to-record-estimated-pre-paid-sales-tax-in-quickbooks-online/00/1273781

     

    I submitted feedback and so should you. Here was mine:

    The state of CA is requiring us to make monthly "estimated" sales tax payments, but our filing requirements continue to be quarterly.

     

    QBO with auto taxes turned on does not allow for proper recording of sales tax prepayments. The suggested work-around to record such a payment is to add an adjustment. However, when adding a "pre-payment" adjustment, the only accounts types allowed are expenses. For some reason, this actually increases the tax liability. When adding a "prior pre-payment adjustment" one is able to choose between an expense account and an income account. You are able to then record the payment as "income" and then from the bank feed, categorize your payment to the same income account to zero it back out.

     

    Ideally, one should be able to add a sales tax payment on an open period. Somewhat less ideally, one should at least be allowed to choose a bank account from the "pre-payment adjustment" which should result in a decreased liability on the sales tax account and a "sales tax adjustment" transaction which can be matched from the bank account.

     

    Attention QuickBooks! This is not an isolated problem. Here is a list of some others with the same issue:

    1. https://quickbooks.intuit.com/learn-support/en-us/taxes/can-someone-help-with-california-sales-tax-prepayments-within/00/1259682 

    2. https://quickbooks.intuit.com/learn-support/en-us/taxes/applying-sales-tax-prepayments/00/1051455

    3. https://quickbooks.intuit.com/learn-support/en-us/taxes/sales-tax-prepayments/00/1082439

    4. https://quickbooks.intuit.com/learn-support/en-us/taxes/sales-tax-prepayments/00/1269319

    5. https://quickbooks.intuit.com/learn-support/en-us/taxes/as-of-2022-we-are-scheduled-thru-the-state-to-make-sales-tax/00/1009956

    6. https://quickbooks.intuit.com/learn-support/en-us/taxes/sales-tax-record-payment/00/880413

    7. https://quickbooks.intuit.com/learn-support/en-us/taxes/how-to-record-prepayment-of-sales-tax-using-the-new-automated/00/247576

     

    L
    LSGMB
    September 5, 2023

    Please Quick Books, we need a solution to this problem.

    L
    LeizylM
    September 5, 2023

    I can share what I know about the features and options you can use in QuickBooks Online (QBO), LSGMB. 

     

    As of now, the ability to record the Sales Tax payment into the Automated Sales Tax feature is unavailable in QBO. As a workaround, we can create an adjustment. You can follow the steps provided by my colleague KurtKyle_M on how to do it. 

     

    I can see how the functionality would be beneficial to your business. I'd recommend sending a feature request directly to our Product Development team. This helps us improve your experience and the features of the program.   

     

    Here's how:

     

    1. Go to the Gear menu and then select Feedback.
    2. Type in your feature request in the description box.
    3. Once done, click on Next.

     

    I've also added this article to learn more about how to record, adjust, and delete sales tax payments: Manage sales tax payments.

     

    Reach out to me if you have additional questions about recording pre-payments in QBO. I'll be more than willing to help. Have a great day!

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