Taxes based on different possibilities and locations are very complicated for individuals. Setting up the sales tax in QuickBooks is easily done as it can be challenging for an employer to calculate the sales tax. This blog explains sales tax and outlines important steps to setup sales tax in QuickBooks Online.
Sales tax is a tax that is given to the government for the purchase of products and services. This tax is one of the taxes that is paid indirectly to States and local governments. The tax rate can’t calculated manually while charging sales tax for goods and services.
What are the steps to Setup Sales Tax in QuickBooks Online?
To modify or setup sales tax in QuickBooks Online, follow the steps given below:
Adding tax rate and agency
Add tax rate and agency by following these steps:
- Step 1: Login QuickBooks account and click on taxes at the left panel. After selecting this option, choose sales tax on this online website.
- Step 2: After selecting the sales tax option, choose Add/edit tax rate and agencies under the list of Related Tasks, which is available at the right corner of the QB online website.
- Step 3: Click on the New button. Choose a single or combined tax rate after clicking the New button.
- Step 4: After selecting a tax rate, enter the tax name, agency payment, and percentage of the tax rate in the sales tax form. If a user pays only one rate to a single agency then, he or she uses the single rate.
- Step 5: Now, click on the Save button.
Adding a combined tax rate
Add a combined tax rate for sales tax tracking in more than one agency in Quickbooks Online. To do this, you must follow the steps given below:
- Step 1: Select Sales Tax in the taxes window.
- Step 2: Choose Add/edit tax rates and agencies under the lists of Related tasks in the QuickBooks online account.
- Step 3: Click on the New button and choose the combined tax rate after clicking this button.
- Step 4: After selecting a combined tax rate option, an employee must enter the name of the combined tax rate and different requirements of sales tax.
- Step 5: Choose Add Another Component for adding more than two rates to a QuickBooks online account. After that, click on the Save button.
Editing Tax Rate
After adding the combined tax rate, you can edit the tax rates with the help of the following steps:
- Step 1: Choose the Sales Tax option after clicking taxes at the left panel in the QuickBooks online account.
- Step 2: Select Add/Edit tax rates and agencies. After choosing this option, select a tax rate that an employee wants to change in the QuickBooks account.
- Step 3: Click on the Edit button after selecting a tax rate.
- Step 4: Enter the new tax rate and name of an agency in QuickBooks Online.
- Step 5: Click on the Save button.
Edit the name of the tax agency
You can edit the name of the tax agency in the following steps:
- Step 1: Click on the Taxes option. After selecting this option, choose Sales tax on QuickBooks online website.
- Step 2: Select rename under the name of an agency in which an individual wants to edit in QuickBooks online.
- Step 3: Enter the new name of the tax agency and then click on the Save button.
Modify the center filter of sales tax
The center filter of sales tax can be changed in only two steps, which include the following:
- Step 1: Choose the Sales tax option after visiting the sales tax at the left panel in the QuickBooks online.
- Step 2: Select the preferred filter option from the dropdown list of the Start of Year and Accounting basis.
Edit settings of sales tax
After changing the sales tax center filter, you can edit the sales tax settings in QuickBooks online. These are as follows:
- Step 1: Select sales tax after visiting the taxes in the QuickBooks account.
- Step 2: Choose Edit Sales tax settings under the lists of Related tasks which is available at the right panel in QuickBooks.
- Step 3: Click on the Yes button if you want to charge sales tax.
- Step 4: Set the following options, which are optional for you.
- Choose a default tax: The default tax rate is automatically chosen in the new sales form. An individual can choose a different tax rate if it is required in a QuickBooks online account, which remembers a different tax rate for the particular customer and overrides the default tax rate.
- Select the mark option if you want to mark all new taxable customers: This identifies that the customers who are added to the form are not tax deductible. In the Tax Info section, the setting can be changed for each customer to identify each customer record.
- Choose a mark option for all new products and services that are taxable: This identifies that the items that are added to the form are already selected in the Tax column. If an individual doesn’t want to charge sales tax, then he or she clears each item of an individual.
- Step 5: Click on the No button, if you do not want to charge sales tax on QuickBooks website. If the sales tax is already charged to earlier transactions, then remove the sales tax to disable it.
- Step 6: Click the Save button.
Deactivation of tax rate
- Step 1: Visit taxes at the left panel and choose sales tax.
- Step 2: Choose Add/edit tax rate and agencies under the Related Tasks list.
- Step 3: Choose the name of the tax rate. Click on the Deactivate button after selecting the name.
- Step 4: After selecting Deactivate, click on Continue.
Now, you will see that the tax rate will get deactivated completely in the QuickBooks online account.
Conclusion
This blog describes the several steps for how do I setup sales tax in QuickBooks Online account. The transactions can be recorded automatically which keeps track of how much sales tax can send to the tax agencies. The sales tax payments can automatically be calculated based on selling products, customer’s tax deductions, and the location where you want to ship and sell the products.
