How to Track Sales Tax as an Expense in QuickBooks?

You can easily track your sales tax on the selling of goods as expenses by creating expense account for those […]

Voiced by Amazon Polly

You can easily track your sales tax on the selling of goods as expenses by creating expense account for those goods in QuickBooks and then select that expense account to keep track of your tax payments which you have made to the government for those goods. You should keep in mind that you will always create expense account within the chart of accounts not outside it. The process of tracking sale tax of your expenses is not automatic.

You have to select the account which you created manually and then track the record of your expenses for each transaction. Once you are done with this, you create the record then you can see summary of all expenses and payments made towards the taxes.

Save Time, Reduce Errors, and Improve Accuracy

Dancing Numbers helps small businesses, entrepreneurs, and CPAs to do smart transferring of data to and from QuickBooks Desktop. Utilize import, export, and delete services of Dancing Numbers software.

Sale Tax

A sale tax can be defined as a tax which is imposed by the government on the every sale of goods and services whether inventory or not. You have to pay these taxes when sale is made. It is the duty of the seller to collect tax and then pay it to government.

Creating of Expense Account

It is very easy to create an expense account in QuickBooks. For creating expense account you have to follow the following steps:

  • First you have to select the list menu and from the drop down menu of list click Chart of accounts.
  • Now click on Account button and then click on new.
  • Now choose for the option expense account and click Ok.
  • Enter the name of your expense account. The name will help you to find your account from the list of accounts.
  • Now click on Continue Button.
  • Hit on button named Tax line and then select the appropriate tax line for your company from the drop down menu.
  • Now in after all changes you have to save your file and move forward, so click on save then OK Button.

Tracking of Sale Tax Expenses

After creating expenses account, now we have to track the sales tax of the expenses. The following are the steps of tracking.

  • First you have to create the normal transaction and then click on the expenses tab.
  • To track tax payment you have to select tax expenses account which you created.
  • In the amount column showing in front of you on your screen enter the amount in it.
  • Select recalculate option and check the total correct appears.
  • Now you can view and track you tax by opening your tax account that you created.

Setting up of Sale tax in QuickBooks

Double Check Your Business Address:

It is the important step because QuickBooks need this to set up tax agency and rates for you.

  • Click on the taxes button on the left side and then click on sale tax.
  • Select the option to set up sales tax.
  • Add business address in set up and if you already done so then it will show up on screen then there is no need of adding.
  • Review all the changes and click on next.

Paying of Tax to other Tax Agencies:

It is necessary to tell QuickBooks that if you are selling your products outside of your country/state/city because there are different rates for the different places. In order to provide the information to QuickBooks follow the following steps:

  • Select the one option from two i.e yes or not.
  • If yes then add the tax agencies for which you pay taxes.
  • Once you completed the above step then click on next button.

Time Interval of File:

In this you have to select the frequency so that QuickBooks remind you when it’s the time to file. And if you are not sure about the date of your file then check your tax agency website in order to know your file frequency. Following are the steps which are to be performed.

  • First click on filing frequency and then choose how often you file from the option from drop down menu.
  • Now add the start date of your file and click on Ok.

Now you will ready to set up. Now the sale tax filed always show up on your invoices, sale receipts, estimates and credit memo.

Applying of Sale Tax

You can apply the sale tax by performing the following steps:

  • Add you’re all the products and services on the form.
  • For each tax item check the box under the tax column.
  • Now update the sales form by clicking on any white space.
  • In the bottom right of your system select the appropriate sales tax.
  • Sometimes if you sell to tax exempt customers then you can choose not to collect sales option from them but by default all the customers are available.
  • If you want to change this setting you have to click on invoices then customer tab from the drop down menu.
  • Find and click on tax info tab in edit drop down menu and click on edit window and check for the box to exempt their account.

Important Point: If you have already charged sale tax on your early transaction then you won’t be able to disable sale tax feature without removing the sale tax from the older transaction.

Tracking of Sale Tax on Purchase from Vendor:

For this you have to manually track sale tax on non sales transaction like bills, checks and purchase order. QuickBooks does not support the feature of track sale tax on non sale transaction.

Tracking of Sales Tax on Purchase of the Expense

  • Create Expense account
    • Click on the company menu.
    • Select the chart of accounts from it.
    • Right click in chart of account window and click new.
    • Now open the choose account type window.
    • Click on the expenses and then continue.
    • Enter all the details in the fields like account name etc.
    • Now in last save the changes and click ox for next step.
  • While creating a transaction in which you want to track sale tax in this case enter the bill as usual. But you have to go to expense window by clicking on expense tab and select the expense account that you created previous.
  • Now you have to enter the amount of sale tax in account column it will helpful in calculating manually.
  • Now check if all detail in the transaction adds up to correct total after you click on recalculating.

Tracking of Sale Tax on Purchase as Liability

  • Now you have to create current liability account.
    • Open the chart of accounts from the company menu.
    • Right click in chart of account window and select for new from the options.
    • Now choose the type of your account from the account type window.
    • Click on other account types and select other current liabilities from the drop down menu of the account type.
    • Now click OK.
    • Enter all the details and the account name of your account.
    • Select save changes option and then Ok
  • While creating a transaction like a bill enter it as usual as in this you will track sale tax but you have to go to expenses tab and select the liability account which you have created earlier.
  • Now enter the amount of sale tax in amount column and this will help you calculate manually.
  • Make sure that every detail in transaction adds up to correct total after recalculating.
  • On the time of paying this sale tax you can see liability that has been accrued by looking at the charts of accounts.
  • You can pay this amount with the regular check.

Adding of Sale Tax to Transaction in QuickBooks

Adding of Sale Tax in Invoice

Whenever you need to collect sale tax then you need to add it manually. So for that you have to create specific tax line item that you can add to invoices. Steps are as following:

  • First go and select the invoice menu.
  • Now create the invoice.
  • Select the add product and services option from the menu.
  • Now click on the product and services and from the drop down menu click on add new option.
  • Now enter the manual name of the sale tax and enter the sale tax rate as per your locality.
  • Now select save and save all the changes you have done.

Important Point to be Remember:

  • Always review the amount field. Be sure that you calculate the sale tax amount from the total of purchase of goods and items.
  • Note down that how much sale tax you added to invoice in the given description field.
  • It will help you to be organized in tax season.

Collecting and Track Sales Tax

For collecting and tracking sale tax we have to perform the following steps:

  • Click on the edit menu tab.
  • Then select company preferences tab on sale tax dropdown menu.
  • You will see the preference on the screen is “Do you charge sale tax?” from the list of preferences.
  • Click Yes.
  • Once the preference is set, you can use the following:
    • Sales Tax Codes: It specify that whether the customer or item is taxable or not.
    • Sales Tax items: It specify that whether the customer or item invoice is taxable or not.
    • Sales Tax Groups: It is the combination of the multiple sales tax item of a company into a combine rate for a customer or invoice.

For collecting and tracking sale tax you need to create at least 1 sale tax item which you can directly do from preferences window.

  • At the time you change preferences after creating customers, inventories or non-inventories part, you will get the opportunity of changing tax status for those existing customers, inventory or non inventories part.
  • Select the option from what you like to update from the update window.
  • After the updating process over, you’re all customers and all items whether inventory part and non inventory part will update automatically.

Importing Sale Tax from QuickBooks Desktop to QuickBooks Online

You can’t convert sale tax perfectly from QuickBooks Desktop to QuickBooks Online. Sometimes some of the taxes convert as journal entries or import only the list and balances when you convert them from QuickBooks Desktop to online.

There is a sale tax payable account at the Chart of accounts page. There will be one sale tax payable account in QuickBooks Desktop and one sale tax agency payable account in QuickBooks Online.

Accounting Professionals, CPA, Enterprises, Owners

Looking for a professional expert to get the right assistance for your problems? Here, we have a team of professional and experienced team members to fix your technical, functional, data transfer, installation, update, upgrade, or data migrations errors. We are here at Dancing Numbers available to assist you with all your queries. To fix these queries you can get in touch with us via a toll-free number
+1-347-428-6831 or chat with experts.


Does QuickBooks keep Track of Sales Tax?

QuickBooks have the feature that it automatically collects sales taxes from invoices or sales receipts. Whenever you record sale with the added taxes your sales tax liability will automatically increase.

How can I Track Sales Tax in QuickBooks Desktop?

Go to the list menu.
Select item from the list.
Find for the sale tax item that you need to update.
Right click on the selected item and then edit item.
In last update all the information was asked by the system.

How can I Track Tax in QuickBooks?

Open the window out–of–state-vendors.
Click on list menu.
Select for the customer and vendor profile list.
Then click on vendor types list.
In every use tax time period you have to run transaction detail report.
To find the total use tax owed to the tax vendor you have to multiply the repot balance by the use tax percentage.

Is Sale Tax is a Expense Account?

You create journal entry, whenever you purchase goods and pay taxes on those goods. If the sale tax is an expense not liability. The price of the item and the sale tax both are included in the total expense for the purchase.

Does Sale Tax is Counted as Revenue?

No, sale tax is not counted as revenue. The sale tax are not included in figures it is collected in retail. Until the time sale tax is not remitted by the government till that time the collected sale tax is listed a a current liability in QuickBooks.

Features of Dancing Numbers for QuickBooks Desktop

Imports

Imports

Exports

Exports

Deletes

Deletes

Customization

Customization

Supported Entities/Lists

Dancing Numbers supports all QuickBooks entities that are mentioned below:-

Customer Transactions

Invoice
Receive Payment
Estimate
Credit Memo/Return Receipt
Sales Receipt
Sales Order
Statement Charge

Vendor Transactions

Bill
Bill Payment
Purchase Order
Item Receipt
Vendor Credit

Banking Transactions

Check
Journal Entry
Deposit
Transfer Funds
Bank Statement
Credit Card Statement
Credit Card Charge
Credit Card Credit

Employee Transaction / List

Time Tracking
Employee Payroll
Wage Items

Others

Inventory Adjustment
Inventory Transfer
Vehicle Mileage

Technical Details

Easy Process

Bulk import, export, and deletion can be performed with simply one-click. A simplified process ensures that you will be able to focus on the core work.

Error Free

Worried about losing time with an error prone software? Our error free add-on enables you to focus on your work and boost productivity.

On-time Support

We provide round the clock technical assistance with an assurance of resolving any issues within minimum turnaround time.

Pricing

img

Importer, Exporter & Deleter

*See our Pricing for up to 3 Company Files

$199/- Per Year

Pricing includes coverage for users
  • Services Include:
  • Unlimited Export
  • Unlimited Import
  • Unlimited Delete

img

Accountant Basic

*See our Pricing for up to 10 Company Files.

$499/- Per Year

Pricing includes coverage for users
  • Services Include:
  • Importer,Exporter,Deleter
  • Unlimited Users
  • Unlimited Records
  • Upto 10 companies

img

Accountant Pro

*See our Pricing for up to 20 Company Files.

$899/- Per Year

Pricing includes coverage for users
  • Services Include:
  • Importer, Exporter, Deleter
  • Unlimited Users
  • Unlimited Records
  • Up to 20 companies

img

Accountant Premium

*See our Pricing for up to 50 Company Files.

$1999/- Per Year

Pricing includes coverage for users
  • Services Include:
  • Importer, Exporter, Deleter
  • Unlimited Users
  • Unlimited Records
  • Up to 50 companies

Dancing Numbers: Case Study

Frequently Asked Questions

 
How and What all can I Export in Dancing Numbers?

You need to click "Start" to Export data From QuickBooks Desktop using Dancing Numbers, and In the export process, you need to select the type you want to export, like lists, transactions, etc. After that, apply the filters, select the fields, and then do the export.

You can export a Chart of Accounts, Customers, Items, and all the available transactions from QuickBooks Desktop.


How can I Import in Dancing Numbers?

To use the service, you have to open both the software QuickBooks and Dancing Numbers on your system. To import the data, you have to update the Dancing Numbers file and then map the fields and import it.


How can I Delete in Dancing Numbers?

In the Delete process, select the file, lists, or transactions you want to delete, then apply the filters on the file and then click on the Delete option.


How can I import Credit Card charges into QuickBooks Desktop?

First of all, Click the Import (Start) available on the Home Screen. For selecting the file, click on "select your file," Alternatively, you can also click "Browse file" to browse and choose the desired file. You can also click on the "View sample file" to go to the Dancing Numbers sample file. Then, set up the mapping of the file column related to QuickBooks fields. To review your file data on the preview screen, just click on "next," which shows your file data.


Which file types are supported by Dancing Numbers?

XLS, XLXS, etc., are supported file formats by Dancing Numbers.


What is the pricing range of the Dancing Numbers subscription Plan?

Dancing Numbers offers four varieties of plans. The most popular one is the basic plan and the Accountant basic, the Accountant pro, and Accountant Premium.


How can I contact the customer service of Dancing Numbers if any issue arises after purchasing?

We provide you support through different channels (Email/Chat/Phone) for your issues, doubts, and queries. We are always available to resolve your issues related to Sales, Technical Queries/Issues, and ON boarding questions in real-time. You can even get the benefits of anytime availability of Premium support for all your issues.


How can I Import Price Level List into QuickBooks Desktop through Dancing Numbers?

First, click the import button on the Home Screen. Then click "Select your file" from your system. Next, set up the mapping of the file column related to the QuickBooks field. Dancing Numbers template file does this automatically; you just need to download the Dancing Number Template file.

To review your file data on the preview screen, just click on "next," which shows your file data.


What are some of the features of Dancing Numbers to be used for QuickBooks Desktop?

Dancing Numbers is SaaS-based software that is easy to integrate with any QuickBooks account. With the help of this software, you can import, export, as well as erase lists and transactions from the Company files. Also, you can simplify and automate the process using Dancing Numbers which will help in saving time and increasing efficiency and productivity. Just fill in the data in the relevant fields and apply the appropriate features and it’s done.

Furthermore, using Dancing Numbers saves a lot of your time and money which you can otherwise invest in the growth and expansion of your business. It is free from any human errors, works automatically, and has a brilliant user-friendly interface and a lot more.


Why should do you change the Employee status instead of deleting them on QuickBooks?

If you are unable to see the option to terminate an employee on your list of active employees on the company payroll, this mostly implies that they have some history. Thus, if you change the employee status instead of deleting it on QuickBooks, the profile and pay records remain in your accounting database without any data loss in your tax payments.


Is it possible to use the Direct Connect option to sync bank transactions and other such details between Bank of America and QuickBooks?

Yes, absolutely. You can use the Direct Connect Option by enrolling for the Direct Connect service which will allow you access to the small business online banking option at bankofamerica.com. This feature allows you to share bills, payments, information, and much more.


Why should do you change the Employee status instead of deleting them on QuickBooks?

If you are unable to see the option to terminate an employee on your list of active employees on the company payroll, this mostly implies that they have some history. Thus, if you change the employee status instead of deleting it on QuickBooks, the profile and pay records remain in your accounting database without any data loss in your tax payments.


What are the various kinds of accounts you could access in QuickBooks?

QuickBooks allows you to access almost all types of accounts, including but not limited to savings account, checking account, credit card accounts, and money market accounts.

Get Support

Bulk import, export, and deletion can be performed with simply one-click. A simplified process ensures that you will be able to focus on the core work.

Worried about losing time with an error prone software? Our error free add-on enables you to focus on your work and boost productivity.

Book your consultation Book Free Consultation
Call Now+1-347-428-6831
Dancing Number

We value your privacy and are strongly against any kind of phishing, spam, and malware. We collect your information for our legitimate business purpose only. This information is safe with our in-built security.

X



    Top