Articles from sales tax and sales tax codes in QuickBooks - How

Are you confused about Sales Tax Items and Sales Tax Codes in QuickBooks? I was too! It took me forever to finally understand what they actually did, how to get the sales tax liability report look right, and where they are presented in the report. After reading the help QuickBooks, and reading tons of articles online, I still had a clear answer. But I finally figured out how to set things in a way that makes sense for me - I hope that makes sense to you.

We are going to discuss the correct setting items and sales tax codes, the proper installation of customers for taxes, sales, the difference between the elements of the sales tax and sales tax codes, using sales tax codes, and run reports of sales tax in QuickBooks.

Setting the correct sales tax items and sales tax codes

These guidelines assume that no sales tax items or tax identification numbers of which still sell in QuickBooks. However, many of you reading this already do. If this is the case, simply go through your lists and see if your items and how these codes are set. IMPORTANT: We strongly recommend not to change anything in QuickBooks files to read the entire article and understand!

First, determine the number of sales agents and tax rates must be reported. You will need to set the items of the sales tax based on this information. If you are unsure, contact a local accountant.

Here's how to set the items and codes:

From the Items List, press Control-N. Select Sales Tax Item. Enter a name for the sales tax - something simple is fine, something that makes sense for you. Enter a more detailed description on the next line. Enter the tax rate, and then reporting agency state in which the tax will be remitted.

Then set up a non-taxable sales tax Item. From the Items List, press Control-N. Select Sales Tax Item. Name element should be non-taxable sales. Enter a brief description, and 0.00% for the rate. Although this is not taxable, select the main tax agency you use.

Then set up sales tax codes. It will be useful to have the sales tax return in front of you to do this. For example, for California, the BOE-401-A page two, there is a list of all the reasons sales are not taxable. Here are some of them:

Resale

Food

Work

Sales to U.S. Government

Out of state sales

From the Directories menu, select Sales Tax code list. Then press Control-N. Enter a three character code and a description of each. For example, for non-taxable labor, you can use a three character code of the LBR, and a job description, "sales -. Not taxable" Do this for all the reasons that sales are not taxable. Make sure that the circle is not taxable is selected.

For sales subject to tax, imposed a sales tax code called TAX. Write a short description. Make sure that the circle is selected tax.

Correct setting for customers to report sales tax

It 'important that customers are set correctly, because when the invoices are generated, it will set the configuration is used here.

Vai to the guest list, choose a customer who wants to look, right click and select Edit Customer: Job. Click the Additional Info tab. In the lower left you will see Sales Tax Information.

First, select the Element Tax. If the customer lives in another state or is otherwise not a passive, select the non-taxable sales tax item described above. If the customer lives in-state or is otherwise taxable, select the tax base sales tax item described above.

Next, select the Tax Code. If the customer is outside the state, not a passive, select the code, "OOS". If the customer is the U.S. government, select the tax code is established for these types of sales. If the customer is in a state, select the code "TAX." Generally, you only need to use these codes in these screens to all customers.

Each time you generate an invoice for your customers, QuickBooks default to the sales tax items and codes that the customer based in Edit: Job screen.

Understand the difference between the elements of the sales tax and sales tax codes

The sales tax QuickBooks Item says the sales tax to the computer for a sale since. In bills, are just above and left of the total. Articles from sales taxes are pretty simple to understand and use.

The sales tax code indicates why the QuickBooks customer or the sale was taxable or not taxable. They are located along the right side of the screen invoice. Even in the invoice screen, in the gray area above the Memo line, you will also see a box that says Tax Code of the customer. The default value for the Tax Code is previously established for each customer.

Sales tax codes are important because the California sales tax return BOE-401-A requires that non-taxable sales to be detailed. If the codes are set and used correctly in QuickBooks, the reports will show this itemization.

Use of sales tax codes

As a general rule, whenever you have an out-of-state customers, we will use the non-taxable sales tax item and OOS sales code. My recommendation is that, although there is work to non-taxable or not taxable shipping invoice, do not change the codes, still use OOS.

For passive customers, use the tax base of the sales tax item on their invoices. However, you may need to use different sales tax codes on different lines. For example, you can sell some products to a customer, but on the same bill may be non-taxable transportation or work. You will ensure that the SHP or LBR code correctly, and that the tax code correctly shows the right side of the invoice. This calculates the sales tax only for your products, and not for shipping and / or labor.

The performance report sales tax to QuickBooks

If you have had time to get everything set up correctly, you efforts will pay when it's time to run the reports of the sales tax!

Vendors menu, select Sales Tax, Sales Tax and responsibilities. Make a date range, to match the date range of your sales tax return.

You will see several columns, total sales in particular, non-taxable sales and taxable sales. Note that the sales tax items are listed on the left side, under the state agency. Also note that the sales tax codes do not appear on the report.

To see the sales tax codes (remember, these are the reasons why sales are taxable or not taxable), go to the non-taxable Sales column, and find the amount that intersects with the row non-taxable sales. Double-click. This report shows all the amounts used for sales tax codes for non-taxable sales. Use this information to help you prepare your return on sales (for California, this information should appear on BOE-401-A, page 2).

Sales Tax Liability report can be used to complete the rest of the sales tax return.

Final Thoughts

The sales tax collection and reporting is very complex, and vary considerably from city to city, in some cases. These guidelines are intended to be general in nature, providing a broad overview of the process of sales tax in QuickBooks. If you need further information, please refer to a professional who can help make sure everything is set according to your unique position and needs. If you wish, you can experiment with ideas here in a sample company file, which you loaded on your computer when it is loaded QuickBooks .......