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Sales Tax collected and Sales Tax payable

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Sales Tax collected and tax payable are 2 different amounts. They should be the same, I had a previous problem with this and it seems I was to do an audit but can not remember how to go about it.

QuickBooks Desktop

qbteachmtAnswer

Sales Tax Payable is affected by your prior payments, if the amount was higher or lower than the amount owed at that point in time. That is just a Running Balance, in other words.

Example:

You owe $1,000 for Jan and pay it. Then, you issue a Credit Memo or otherwise Change something in Jan. Now Feb is going to reflect that difference that happened because of changes in Jan.

Perhaps the "audit" you are asking about is the Audit Trail report. Run it on Sales transactions, dated in the prior month, for changes Entered/Modified after the end of that month. This reveals where someone made changes to your historic data = making a mess of the prior sales data, affecting Sales and Sales Taxes.

qbteachmtAnswer

Sales Tax Payable is affected by your prior payments, if the amount was higher or lower than the amount owed at that point in time. That is just a Running Balance, in other words.

Example:

You owe $1,000 for Jan and pay it. Then, you issue a Credit Memo or otherwise Change something in Jan. Now Feb is going to reflect that difference that happened because of changes in Jan.

Perhaps the "audit" you are asking about is the Audit Trail report. Run it on Sales transactions, dated in the prior month, for changes Entered/Modified after the end of that month. This reveals where someone made changes to your historic data = making a mess of the prior sales data, affecting Sales and Sales Taxes.

M

mizelec1

Some how or another I lost the option to pay sales tax under vendors any suggestions

JasroV

We can perform some troubleshooting steps to get around this issue, @mizelec1.

Let’s update your QuickBooks Desktop (QBDT) software to ensure your company file is equipped with the latest security features and fixes. Here’s how:

Go to the Help menu.
Select Update QuickBooks Desktop.
Go to the Update Now tab.
Click Get Updates to start the download.
When the download finishes, restart QuickBooks.
Accept the option to install the new release.
Close and reopen QuickBooks for the updates to sync.

You can also see this link for more details: Update QuickBooks Desktop to the latest release.

If the issue persists, I recommend running the Verify Rebuild utility tool. This easily identifies issues within your company file and fixes them right away.

Once everything looks good, you can now pay your sales tax from the Vendors menu. In case you need to make some adjustment to your taxes, see this article that can walk you through the process: Process sales tax adjustment.

If you have further questions about paying your taxes in QuickBooks, you can share it with me. I’m more than happy to assist you. Have a great day and keep safe!

john-pero

Current balance in "collected" would be all taken in. Liability payable is for filing period. Should be only one account. It might not hit zero. Do not use Write Check to pay this but use Vendors>SalesTax>Pay Sales Tax.

Also, there may be a difference in tax reported between Accrual and Cash basis if you have open Invoices.

A

Anonymous

John,

I have a big issue. I never had a problem until I updated to QB2020. I use a Cash based system in where I do not pay sales tax until a job is completed. I don't want to pay tax on an invoice where I've collected a deposit. Especially if a client doesn't pay and I get stuck with full sales tax. This also could span between quarters causing an issue with Accrual.

However, in QB2020, now there is a Cash and Accrual reporting method which is confusing. If I set it to Cash is shows that the amount I've collected versus what I owe being different and usually lower. If I do Accrual is shows all the open invoices I have and nothing seems to match.

The issue is that if I go to Vendors>Pay Sales Tax for the period, this number doesn't add up to the number I put in my States Tax table to pay. Those numbers I put in equal the Collected tax. So what am I supposed to do? I cannot just add extra money to my states tax form as it will not accept it. If I put it as excess collections (which is typically a few pennies) and happens often, $52.00 is not typical and likely to throw a red flag causing an audit or additional fee for withholding or overcharging clients.

The way QB2020 is recording/report sales tax payable is not good and I need to know how to navigate it so that I don't have standing balances. My sales tax payable has always been $0.00 after I paid. Now if I go back to my past Sales Tax Liabilities it either shows a +/- and this isn't good. I need to get this balance ASAP. Thanks.

C

CharleneMaeF

Glad to have you here, Matt K.

Allow me to share some insights on how the accounting method affects your sales tax in QuickBooks.

Your accounting method affects the sales tax amount you owe. If you're using the accrual basis method, you report your income when you bill it. However, when you use the cash basis method, you report your income when you receive it.

Moreover, you'll have to ensure that you enter the correct payment date on when the sales tax payment happened.

Since modifying your accounting basis will affect your reports, I recommend consulting with an accountant. They can offer you some accounting advice to ensure the changes don't mess up your financial records.

You may want to check these articles to learn more about how sales tax works:

Additionally, I've added an article about running sales tax reports in QuickBooks Desktop. This helps you make sure everything is accurate before paying taxes: Sales Tax Report.

If you need additional help with the Sales Tax feature in QuickBooks, please let me know by clicking the Reply button below. Have a great day!

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