{"id":255,"date":"2020-06-17T11:57:00","date_gmt":"2020-06-17T11:57:00","guid":{"rendered":"http:\/\/www.roecpa.com\/blog\/?p=255"},"modified":"2020-07-06T11:59:18","modified_gmt":"2020-07-06T11:59:18","slug":"5-things-you-need-to-know-about-sales-taxes-in-quickbooks-online","status":"publish","type":"post","link":"https:\/\/www.roecpa.com\/blog\/5-things-you-need-to-know-about-sales-taxes-in-quickbooks-online\/","title":{"rendered":"5 Things You Need to Know About Sales Taxes in QuickBooks Online"},"content":{"rendered":"<p><em><a href=\"http:\/\/www.roecpa.com\/blog\/wp-content\/uploads\/2020\/07\/451583115.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-medium wp-image-256\" src=\"http:\/\/www.roecpa.com\/blog\/wp-content\/uploads\/2020\/07\/451583115-300x200.jpg\" alt=\"Roe CPA\" width=\"300\" height=\"200\" srcset=\"https:\/\/www.roecpa.com\/blog\/wp-content\/uploads\/2020\/07\/451583115-300x200.jpg 300w, https:\/\/www.roecpa.com\/blog\/wp-content\/uploads\/2020\/07\/451583115-1024x683.jpg 1024w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a>The most important thing you need to know about sales tax is that administering it correctly can be challenging.<\/em><\/p>\n<p>If you sold only one type of product to customers in one city, collecting and paying sales tax would be easy. But most businesses have a wider reach than that.<\/p>\n<p>QuickBooks Online offers tools that allow you to set up sales tax rates and include sales tax on sales forms. Further, it calculates how much you must pay to state and local taxing agencies.<\/p>\n<p>This is one of the most complicated areas in QuickBooks Online because you may have to deal with numerous taxing agencies. If you\u2019re not already working with sales taxes, we strongly recommend you let us help you get everything set up correctly from the start. Taxing agencies can audit your recordkeeping and you want to make sure it is set up correctly.<\/p>\n<p>That said, here are five things we think you should know.<\/p>\n<p><strong>QuickBooks Online calculates sales tax rates based on:<\/strong><\/p>\n<ul>\n<li><strong>Where you sell.<\/strong> Every state is different. If your business is located in Florida and you sell to a customer in Minnesota, you\u2019ll be charging any sales tax levied by the state of Minnesota and possibly the city and county and other taxing authorities \u2013 if you have a connection, a \u201cnexus\u201d in that state (a physical location, active salesperson, etc.).<\/li>\n<li><strong>What you sell.<\/strong><\/li>\n<li><strong>To whom you sell.<\/strong> Some customers (like nonprofit organizations) do not have to pay sales tax. You\u2019ll need to edit their customer records to reflect this in QBO. Open a customer record and click the <strong>Edit<\/strong> link in the upper right. Click the <strong>Tax info<\/strong> tab and make sure there\u2019s no checkmark in the box that says <strong>This customer is taxable<\/strong>. The <strong>Default tax code<\/strong> will be grayed out, and you can enter <strong>Exemption details<\/strong> in that field.<\/li>\n<\/ul>\n<p><img decoding=\"async\" src=\"images\/image_library\/articles\/QBO-Feb2020-img1.jpeg\" alt=\"QuickBooks tips\" \/><\/p>\n<p><span style=\"font-size: 10pt;\"><em>Customer records for exempt organizations should contain details for that exemption. You\u2019ll need to see their exemption certificate or at least know its official number.<\/em><\/span><\/p>\n<p><strong>Intuit now offers a revamped version of QuickBooks Online\u2019s sales tax features.<\/strong><\/p>\n<p>At some point, you\u2019ll be asked if you want to switch to the new, more automated system. The actual mechanics of the process are simple, but you\u2019ll be moving historical and in-process data to a new structure. If you have sales tax set up right now and your situation is at all complicated, you\u2019re going to want our help with the transition.<\/p>\n<p>This enhanced feature only supports accrual accounting.<\/p>\n<p><strong>You can combine individual tax rates.<\/strong><\/p>\n<p>If you are required to pay city, county, and state sales tax rates for a particular customer, for example, you can create a <strong>Combined tax rate<\/strong> that contains all of the individual components. The customer will only see the total on an invoice or sales receipt, but QuickBooks Online will track each one accordingly for payment and reporting purposes.<\/p>\n<p><img decoding=\"async\" src=\"images\/image_library\/articles\/QBO-Feb2020-img2.jpeg\" alt=\"QuickBooks tips\" \/><\/p>\n<p><span style=\"font-size: 10pt;\"><em>You can combine sales tax rates in QuickBooks Online (image above from current <strong>Sales Tax Center<\/strong> in QuickBooks Online, not the enhanced one).<\/em><\/span><\/p>\n<p><strong>Product and service records should contain sales tax information.<\/strong><\/p>\n<p>This is another area that will require some research. Just as some services are subject to tax, some products are not (like groceries in Arizona). So, you\u2019ll need to find out what the rules are for what you sell. You can find this information on the website of the state\u2019s Department of Revenue (sometimes called the Department of Taxation).<\/p>\n<p>Once you know, you can record that status in QuickBooks Online. Open a product record by going to <strong>Sales | Products and Services<\/strong> and clicking <strong>Edit<\/strong> in the <strong>Action<\/strong> column or create a new one by clicking <strong>New<\/strong> in the upper right. Scroll down to <strong>Sales tax category<\/strong> in the record. You can choose between <strong>Taxable &#8211; standard rate<\/strong> and <strong>Nontaxable<\/strong>.<\/p>\n<p>There\u2019s a third option here: <strong>special category<\/strong>. This gets complicated. We can help you determine whether it applies to you.<\/p>\n<p><strong>QuickBooks Online tracks the sales tax you owe.<\/strong><\/p>\n<p>You can see what you owe to each agency by running the <strong>Sales Tax Liability Report,<\/strong> and record payments when you\u2019ve made them. Summary and detail versions of the <strong>Taxable Sales<\/strong> report are also available.<\/p>\n<p>Once you get sales taxes set up in QuickBooks Online, it\u2019s easy to add them to the relevant sales forms. Getting to that point, though, takes time, study, and careful attention to detail. If you\u2019re getting ready to sell, or you\u2019re already selling and struggling with sales taxes, let us know. We can schedule an initial consultation to see how we can be of assistance.<\/p>\n<h3>SOCIAL MEDIA POSTS<\/h3>\n<p>Did you know that QuickBooks Online can calculate and apply sales taxes to transactions? However, setup requires some upfront research. Here are a few things to get started.<\/p>\n<p>Does your business have to charge multiple levels of sales taxes? QuickBooks Online allows you to combine them. Here\u2019s how.<\/p>\n<p>QuickBooks Online calculates sales taxes based on where and what you sell, and to whom. It\u2019s a bit complicated and here is why. We can help you get through setup.<\/p>\n<p>Did you know that Intuit has released an enhanced version of QuickBooks Online\u2019s <strong>Sales Tax Center<\/strong>? Here are the details and we can help you make the transition.<\/p>\n<p>Call Roe CPA, P.C. today at\u00a0<strong>678-969-0523<\/strong>\u00a0and learn why our clients would not think of using another Atlanta CPA firm for\u00a0<strong><a href=\"https:\/\/www.roecpa.com\/quickbooks-support.htm\">QuickBooks training and support<\/a><\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The most important thing you need to know about sales tax is that administering it correctly can be challenging. If you sold only one type of product to customers in one city, collecting and paying sales tax would be easy. But most businesses have a wider reach than that. QuickBooks Online offers tools that allow [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[65],"tags":[],"class_list":{"0":"post-255","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-quickbooks","7":"entry","8":"has-post-thumbnail"},"_links":{"self":[{"href":"https:\/\/www.roecpa.com\/blog\/wp-json\/wp\/v2\/posts\/255","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roecpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roecpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roecpa.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roecpa.com\/blog\/wp-json\/wp\/v2\/comments?post=255"}],"version-history":[{"count":1,"href":"https:\/\/www.roecpa.com\/blog\/wp-json\/wp\/v2\/posts\/255\/revisions"}],"predecessor-version":[{"id":257,"href":"https:\/\/www.roecpa.com\/blog\/wp-json\/wp\/v2\/posts\/255\/revisions\/257"}],"wp:attachment":[{"href":"https:\/\/www.roecpa.com\/blog\/wp-json\/wp\/v2\/media?parent=255"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roecpa.com\/blog\/wp-json\/wp\/v2\/categories?post=255"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roecpa.com\/blog\/wp-json\/wp\/v2\/tags?post=255"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}