 QuickBooks Desktop 2023. Pay sales tax. Let's do it within 2-its. QuickBooks Desktop 2023. Support Accounting Instruction by clicking the link below, giving you a free month membership to all of the content on our website, broken out by category, further broken out by course. Each course then organized in a logical, reasonable fashion, making it much more easy to find what you need then can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Here we are in QuickBooks Desktop. Get great guitars, practice file. We started up in a prior presentation. Going through the setup process we do every time. Maximizing the home page to the gray area, noting in the view drop-down. We've got the hide icon bar, open windows list checked off, open windows open on the left. Reports drop-down, company and financial, P&L, profit loss, income statement, change, range, 01, 01, 2, 3, 12, 31, 2, 3, customize, font, change, 14, O, Y, K, and reports drop-down again, company and financial. This time the balance sheet customized in it, change, range, 01, 01, 2, 3, 12, 31, 2, 3, font to the number in changing, 14, O, Y, K. That's the setup process that we do every time. Now we're going to be talking about paying off the sales tax which we can see down here in the liabilities section. We've been accruing upward the sales tax. We're going to be paying it off. Now you might say well it's a payable so why don't I just pay it off with like a check form. We will in essence be using a check type form but we'll be using the special widget which once again will have a special check. So if we go on over to the homepage you'll recall that if we didn't have any other widget kind of tied to it, we might just use a right to check form even if we did electronic transfer that's the form that decreases the checking account. But when there's a widget to be used such as the pay bill form which is a type of check form, we can use that because it more easily ties things out on the bookkeeping side within QuickBooks gives us some more indications of what's happening. The same will be true with the sales tax form. The same will be true with the pay liabilities form. Let's give a quick recap on sales tax, how it works. Remember that every time taxes get involved that's the government throwing a wrench into the system so you could see it doesn't quite look quite right here you got the sales tax up here which is kind of makes sense because we're paying off a liability but really when we charge the sales tax it happens down here when we create the invoice form and the sales receipt form. So the reason for that is that the idea of the sales tax is that it's not an tax on us get great guitars the company it's supposed to be a tax on the people buying stuff but we the company get great guitars are being used as the collection tool in order to collect the tax and then give it on over to the government in the United States it's a state and local tax that that we have to put together so we turned on the sales tax let's just recap that when you're setting up the sales tax three things you got to do or think about one where are you where's the sales tax can be charged where are you located how to turn on the sales tax and then you got to set up your items what you're selling that usually drives what sales tax will be accounted for or not as you create the invoice in the sales receipts and then you might have customers that although they would be exposed to sales tax for that particular item or for exempt for some reason such as there they're not at the end they're not the end consumer for example so if I go to the edit drop-down preferences we turned on the sales tax down here in the sales tax tab company preferences we turned on the sales tax we then could add the sales tax items here or you could go into the items list list drop-down and then the items list and we set up our sales tax items now the sales tax items even if you're only in one location you might have multiple people that you have to pay such as the state and the city for example and you might have different sales tax items for multiple locations that you're subject to sales tax in a more complex scenario in our case we're just paying one location which includes the state and the the city we're going to say and then we grouped them together so that they can be then shown on the sales tax forms when we make an invoice or sales receipt then we can go to the customers over here in the customers drop-down customer center and as we enter a new customer it will typically apply the default sales tax driven by the item but if I go to the edit drop-down up top and we go to the sales tax items here here's the tax code is on by default you could turn that off so that the customer would not be subject to tax and if you have multiple locations then the customer can assign which location is going to be they're going to be taxed at and the rate that will be assigned and that will track you know within the QuickBooks system so closing that out let's just think about the logistics real quick if I go to the edit drop-down preferences company preferences sales tax how is this going to work well if I turn on the sales tax I could say that I'm going to be charging or increasing the payable every time I make an invoice that would be on an accrual method which we're using here or possibly when I receive the payment meaning I shouldn't be accruing up my sales tax until I actually get paid so that's one thing to consider the next thing would be how often do I have to pay off the sales tax when I enter an invoice I'm collecting sales tax do I have to pay that sales tax directly to the government every time I make a sale that would be quite tedious no typically and this will depend on your location and how much you earn you will have to give them the money monthly or quarterly or annually so in our example we're going to say monthly so for the month of January we collected the sales tax we're applicable for sales that we made and then we're going to be paying it by the end of February that's going to be the general idea of the sales tax obviously logistically we have to collect it into a payable and then pay it at some future date and then the question is what's that system is it going to be quarterly annually or in our case will say monthly we're going to pay the first month of sales tax that happened through January and the current month in our practice problem which is February closing that out let's go to the profit and loss and let's just take a look at us an invoice that was subject to sales tax opening up the sales items let's open up an invoice here open up an invoice and so here's the sales tax that was charged on the invoice now remember that we do not record the the sales tax as income the income that was recorded from this was the twenty five thousand plus the four thousand not the one thousand four fifty the reason being that again it's not supposed to be a tax to us it's not part of what we're charging to the client it's it's us being the tax collector and collecting that one thousand four fifty so it shouldn't be revenue to us is the idea if that's the case then it also makes sense that we should not have an expense account for sales tax expense we didn't included in revenue we're not going to have an expense account that's often confusing to a lot of people instead what happened it went to the balance sheet because it's it's not going to the income statement at all and we increase the liability instead of increasing revenue and then when we pay the sales tax we're not going to have a sales tax expense we're just going to simply decrease the payable here so no sales tax revenue it's not included in revenue and no sales tax expense it's going to go in and out of the payable account so when we make the payment it's going to decrease the payable account the other side's going to go to the cash account up top all right so let's go into the home page and just take a look at the widget the widget is up here in the vendors area because even though we're not buying something from somebody where it's kind of acting like an accounts payable type of account here so I'm going to go into the widget we've got a couple things within the widget we got to prepare the state sales tax forms run the following reports to help fill out your state sales tax forms so depending on where you're located you know you're going to have to fill out the forms you've collected the sales tax you might have to fill out the forms which you can use the the reports to do so you got the sales tax liability report let's run this from 010123 to 2 let's say 022823 it's been two months so here's the two months of of activity thus far so the total sales the non taxable sales these are going to be the taxable sales because some of the sales were not subject to the taxes and then the tax that we collected and the sales tax then that is payable here's the rates because we have the two different the state and the and the local now we're going to run it for the end of January 013123 so these are the numbers as of the end of January right so here's the sales here's the tax that we collected this is what we would assume that we have to pay basically by the end of February right we've collected in January we've got a month to pay it that's going to be our assumption so I'm going to close this back out we got the sales tax revenue summary let's run this from 010123 to 12 let's make it 022823 and so there we have it we're focusing in on the revenue side of things which might be necessary to fill out the sales tax forms so we've got the taxable sales we've got the non taxable sales and then we've got the total that total we would expect then should tie out to in essence our income statement or profit and loss 68841 it's not going to quite match out because if I go to my profit and loss this is for the same to because there's only really two months that we've had thus far and it might be easier to see if I ran this report like 022823 and let's make a comparative report drop down and see the month by month comparison so now I can see it side by side and my total revenue for the two months is that 68 it's a little off minus the 68711 the difference is that 130 and you'll recall if you've been following along with the practice problem that in the supplies area I believe it was we've got that 130 that's from us entering a billable expense that basically refunded the expense account which is not really the way you want to set things up so you can go back and take a look at that and and when you have those billable items you got to be careful of that because we want to generally record the revenue and then the expenses revenue minus expenses being the net income but we're going to we're going to that's not going to bother us we're going to keep that's the revenue side let's take a look at the sales manager and look at the sales liability report one more time let's run it for the full range 010123 to 022823 for the two months I'm going to make it a little bit larger customizing it fonts and numbers let's bring it up to like 11 and because it's a fairly wide report so let's say okay there we have it that's perfect okay so then over here at the end of February this number you would think would tie out to what's on the balance sheet so that's the 289755 so we've got the 289755 that makes sense let's change this balance sheet to a month by month balance sheet so I'm going to hit the drop down I'm going to say 010123 to 022823 and let's see if we can make it by month okay so now we've got the end of at the end of January and then we've got the February data so if I go back over here into the sales tax liability and I change this to 01012 let's say 013123 then now we're at the 234385 if we go back on over here we're at the 234385 and this is the end of February so we can see how that kind of ties out now we're in February we're going to pay off the liability that has accumulated at the end of the month of January that's the idea so let's go back on to the liability manager I'm going to close this out these reports can help us to fill out that you know tax the reporting forms if we need to you've got the related tax view sales tax items and so on down below we're just going to use the widget now to pay the sales tax let's run it for the full range 010123 to 022823 for the two months I'm going to make it a little bit larger customizing it fonts and numbers let's bring it up to like 11 and because it's a fairly wide report so let's say okay there we have it that's perfect okay so then over here at the end of February this number you would think would tie out to what's on the balance sheet so that's the 289755 so we've got the 289755 that makes sense let's change this balance sheet to a month-by-month balance sheet so I'm going to hit the drop-down I'm going to say 010123 to 022823 and let's see if we can make it by month okay so now we've got the end of at the end of January and then we've got the February data so if I go back over here into the sales tax liability and I change this to 01012 let's say 013123 then now we're at the 234385 if we go back on over here we're at the 234385 and this is the end of February so we can see how that kind of ties out now we're in February we're going to pay off the liability that has accumulated at the end of the month of January that's the idea so let's go back on to the liability manager I'm going to close this out these reports can help us to fill out that you know tax the reporting forms if we need to you've got the related tax view sales tax items and so on down below we're just going to use the widget now to pay the sales tax so I'm going to pay the sales tax I'm going to say that we want to do this the check date let's make the check check date as of 022822 and then we want to show the liabilities as of the end of 013122 and then the check is going to be there so we'll use a check if you don't if you're using an electronic transfer then you can delete the check number for example and