QuickBooks Online Sales Tax

 

QuickBooks Online Sales Tax What Is It

 

QuickBooks Online Sales Tax

Would you like to understand what sales tax really is and how it is managed in QuickBooks online? Well then you should stay tuned to this article introduction and setup to sales tax in QuickBooks online.

If you have any questions about this topic you can leave them in the comments section below and I’ll do my best to help you and of course if you feel the article helped you I hope you will click follow the blog to get updates on new articles that come out all the time.

What is sales tax?

Now you may well ask what sales tax is.  Well we know the price you charge is the income that you earn from the sale and the extra money you collect is the sales tax. for example if you charge a hundred dollars for your merchandise and the sales tax percent is eight percent that means the sales tax amount would be eight dollars and the customer would pay a hundred and eight dollars. The hundred dollars would be recorded as income earned to you and then the other eight dollars you would owe to the government for sales tax.

In fact that eight dollars might be owed to two separate departments of government. If you sold in two separate states.  that's what you have to keep track of using QuickBooks online.

When do we pay sales tax?

You may also ask when do we pay sales tax?  Well the time period that you make sales and accumulate sales tax could be called the accrual period or the sales tax period it's the time period that the sales tax is accumulating for sales that you made for that time period.

For example a typical sales tax accrual period would be all the sales that you recorded from January 1 to march 31. Then after the accrual period is over the time period that you are in is the period called tax due. This is the time period that the prior periods tax is payable to the government and in this example it would be from April 1 to April 20.

So all the sales you made between the beginning of January and the end of March have sales tax accumulated that you have to send into the government within 20 days of the end of the sales tax period. If you're using this example and of course if you pay after the time period is over that sales tax is designated as overdue in QuickBooks online.

Sales tax center

Now all the tax that accumulates from sales is in one tax period and each sales tax period due is represented as a rectangle in the sales tax center in QuickBooks online.

The sales tax center is a window that shows the status of each sales tax period that you are responsible.

Any tax period that you made a taxable sale will show up in this window as a rectangle representing a sales tax period whose accumulated amount you would have to send in.

For example you would make some sales during an accrual period and the bottom of the sales tax center window would show each tax. That you accumulated and it would say accruing in the bottom right. then after that period is over that very same sales tax period’s tax and payment would then move to the sales tax due section of the sales tax center.

which means it comes up a little higher on the page and it would tell you the total amount accumulated in the prior period and the amount you have to send in and if you wait too long before paying that sales tax rectangle for that time period will move up to a higher section on the page the section of overdue sales tax and it would tell you the date that it was due and the amount you were supposed to pay.

you record the sales tax payment for each of these rectangles that represent a different tax period for a different department of government once you pay the payment is permanently listed in the very top section of the page that represents the sales tax center.

you may also notice at the top of the sales tax center is a date range pull down where you can choose the sales tax periods that you want to see the status of and thereby isolating the specific accrual periods that you would like to see if they are paid overdue or accruing.

Believe it or not it takes less than 60 seconds to set up sales tax in QuickBooks online because ninety percent of the QuickBooks users who need to collect sales tax only have one sales tax to collect and they do it based on the location of their company.

So it will take less than 60 seconds to set up but first let's set you up for the course. Now you can learn this course just by reading the article you need to follow step by step in order to learn.

If that's you first….

1.    You must have a QuickBooks online “PLUS” version account.

2.    You must also be able to input the three basic QuickBooks online lists:  Accounts, Customers & Products and Services.

3.    You should have some basic understanding and some small experience with QuickBooks online.

Before you start learning in this course you don't need much experience and you don't need much knowledge in QuickBooks online.

But you at least have to be able to manage the three lists and it would be nice if you previously recorded one or two transactions and looked at the results in one or two of the QuickBooks reports.

What’s to come after read this article?  

So what's to come after read this article?  Well I will try to help you get the software for free but I cannot promise. the next article will show you how to sign up for the trial version of QuickBooks online. because that's free for 30 days it also shows how to navigate the QuickBooks online interface so even if you are not following step by step it might be worth it to read the next article it will give you the lists. That you need to input to set up your empty blank account.

So that you'll be able to follow step by step if you want to know. That article is part of another QuickBooks online course so I ask you to be patient and be flexible and read it and do what's necessary. We will set up sales tax together in the article that follows.

I thank you very much and I know you will be an expert in QuickBooks online sales tax when you are finished with this course.