QuickBooks Online: Sales Tax on Invoices

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-Bank Reconciliations: • QuickBooks Online: How...
-Managing Sales Tax: • QuickBooks Online: Sal...
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Table of Contents:
00:00 Introduction
00:38 Automatic Sales Tax Setup
03:28 Adding Sales Tax to Invoices
06:38 Sales Tax Liability & Sales Tax Forms
10:25 Balance Sheet
11:18 Multi-state Sales Tax
17:12 More complex situations

[@user-je2cw6gt3w]

This is great thanks

[@HectorGarciaCPA]

:)

[@jessicafigueroa6498]

Thank you for sharing your knowledge. Your videos are clear and concise. Can you provide insights on the sales taxes implications when selling to another country? Is it taxable?

[@HectorGarciaCPA]

Dont have experience in this area

[@MGMerriman]

I certainly appreciate all the information you’ve provided on KZbin! I am curious how to track a loss. If a customer job exceeds the value of the equipment, they may abandon the equipment and not pay the bill. How should I document / track these types of transactions? I figure it must be a loss. I will be talking with my CPA soon. Just thought I’d ask. I use Quickbooks desktop.

[@HectorGarciaCPA]

Just make a journal entry against Accounts Receivables and Bad Debt for the invoice value the customer did not pay for. The concept of “abandoned the equipment” might not be an accounting event

[@marioopeno8787]

The best QBO tutorial. Detailed and depth explanation. Hi Hector, just a newbie in QBO. Just want to ask question regarding the Net Income showing in the Balance Sheet. In some QBO article that i read, it says that at the end of the fiscal year, QBO will automatically transferred the net income to Retained Earnings. So, comes the following year, what would be the presentation in the Balance Sheet in QBO. Will it show Retained Earnings representing the net income of the previous year and will show a net income for the current year? Your input is highly appreciated.

[@HectorGarciaCPA]

Net income on curremt year and retained earnings all previous years net incomes

[@user-xl3vs4nt2d]

Hello. In California for filing the sales tax we report to the California Dept. of Tax and Fee Administration. With a seller's permit when we buy parts we don't pay the taxes as it gets passed to the customers. But there are a few times where for some parts we do end up paying tax on. In this case how can we add a line/section on the tax liability report to enter the "cost of tax paid for purchases resold prior to use" to deduct the tax paid on the part purchased and to only be able to pay the pending cost on mark-up price? I am new to QBO. Thank you.

[@HectorGarciaCPA]

I dont know the sales tax rules for CA

[@yayabera]

Great topic! Sales tax is very confusing to me. Should I include sales taxes when we already paid taxes at the time we purchased the parts? Also, if a service invoice includes parts, does that makes the labor also taxable? We are based in Florida.

[@HectorGarciaCPA]

QB tracks Sales Taxes in your invoices to customers. Not related to the sales tax you paid. If you include parts and labor, generally the whole thing is taxable

[@IntoLanguagesGlobal]

Could you please let me know if I need the advanced subscription for import invoices from my vendors. I currently have the essential subscription, and I am not able to do it. Thank you so much for your valuable help!

[@HectorGarciaCPA]

Yes, only Advanced

[@delonaarcher]

Have you filled out a California Sales Tax return from the QuickBooks online Sales tax liability report? I work with a company that sells to over 70 different cities/districts. The liability report does not group by county.

[@HectorGarciaCPA]

I dont do California Sales Tax Returns, but I heard of that specific complaint! I dont know if there is a solution

[@maryhinkle1756]

I just recently converted to QBO from desktop and my state of Indiana has a 7% sales tax. It is necessary that I print my invoices for my customers and I noticed when printing QBO calculates the 7% tax dollar amount correctly but on the invoice it shows a random percentage amount on the tax line of the percentage of what the tax dollar amount is of the total of the invoice. My invoices have labor and parts, so these strange percentage amounts showing are very confusing on the invoices to the customers. Why would it calculate this amount? I do not understand for what reason it would be needed.

[@HectorGarciaCPA]

No clue… sales tax is always a random rabbit hole

[@seanfaerber4918]

Hello, I wish this would address more issues that I see with Cash basis and accrual basis accounting. My clients invoice and the sales tax is calculated automatically in quickbooks at the time of invoicing. However, they are cash basis and technically that quantity of sales tax should be calculated as if the time of cash receipt. What is best practice in this case where you still want to invoice the customer beforehand, yet maintain accurate sales taxes which should be calculated at receipt of cash. Please help if possible. I am worried about sales tax rate accuracy to protect clients from potential audits.

[@HectorGarciaCPA]

Most states are accrual basis for sales tax purposes. Regardless of how the taxpayer does the income tax return.

[@user-de9xr3pc4d]

If client is using a 3rd party app that integrates with QBO and pushes the invoices over TO QBO, do we still need to use the QBO Sales Tax Feature?

[@HectorGarciaCPA]

No… imported invoices will bring the sales tax as an item

[@user-de9xr3pc4d]

@@HectorGarciaCPA Thank you!

[@MalindaWaller-wc5ni]

do I need to track Sales tax paid to vendors for products I sale in my store

[@HectorGarciaCPA]

In US, No… BUT, you shouldn’t pay sales tax for resell-able items, otherwise you are paying tax twice

[@tlatolon]

We are based in OK and sell all over the country. Mainly use tax for both state, county and city. how can I set it up for use tax?

[@HectorGarciaCPA]

Never been able to

[@garenpletzer1532]

Trying to set up a account for the discount and it wont show up under account under the add an adjustment.

[@HectorGarciaCPA]

You might need to leave the screen, add the account (as an other income or other expense), then come back to the screen

[@AnitaRuybalid]

I have found out that QuickBooks isn't always accurate when I use the automated sales tax so I haven't been able to use this feature. Have you or your clients ran into this same problem? I am based in Nebraska.

[@HectorGarciaCPA]

Yeah. Sales tax is a hot mess

[@Omahaneb6]

Why can I not split state and local sales tax?!

[@HectorGarciaCPA]

I dont know :(

[@Omahaneb6]

@@HectorGarciaCPA I found out some counties have no local sales tax which confused me (problem solved ) . Appreciate your videos

[@HectorGarciaCPA]

@@Omahaneb6 great