Paying Sales Tax

Paying Sales Tax

When it's time for you to pay your sales tax, open the Pay Sales Tax window. From there, you can issue checks for sales tax payments and relieve your sales tax liability at the same time. By using the QuickBooks sales tax payment process, all accounts are charged properly. At any time you can examine the information in this window if you want to know the status of your sales tax payable.

Open the Vendors menu and select Sales Tax.

Select Pay Sales Tax from the side menu.

Verify that the bank account is correct.

Verify the date that will appear on the check.

Verify the date through which sales tax is due.

Click to check each sales tax item you want to pay.

Check the To Be Printed box if you plan to use QuickBooks to print this check.

Click OK to execute the payment.

Taking a Discount for Early Payment

If you pay your sales tax early or on time, you might have an opportunity to take a discount for the timely payment. If you simply reduce the amount you pay in QuickBooks, it will look like you didn't pay the entire bill and you'll still carry a liability on the books. Instead, you can record the amount of the discount first, offsetting the amount you owe; then when you're ready to pay the tax, the correct amount appears.

Open the Vendors menu and select Sales Tax.

Select Adjust Sales Tax Due from the side menu.

Enter the date on which the discount is taken.

Enter the name of the government agency to which you pay the sales tax.

Enter the account in which you record discounts .

Click the Reduce Sales Tax By option.

Enter the amount of the discount.

Click OK.

Accounting for Sales Tax

When you create an invoice for a taxable sale, several accounts are affected. Not only do you increase your sales revenue account and your accounts receivable account (or cash, if it is a cash sale), but your sales tax liability account is affected as well. Then, at the end of the month, when you pay your sales tax, the liability account is reduced. Here's how a sample transaction is recorded in QuickBooks.

An invoice is issued for the sale of $100 of taxable items and $5 sales tax, for a total of $105. Here are the accounts that are affected:

Note that if the item you sold is an inventory item that cost you $60, these accounts are affected as well:

	Debit	Credit
Cost of Sales	60.00
Inventory		60.00

When you ultimately pay your sales tax, these accounts are affected for the total amount of your current liability:

	Debit	Credit
Sales Tax Liability	xx.xx
Cash		xx.xx

Chapter 7. Using Time-Saving Features

What You'll Do

Memorize a Transaction

Memorize a Group of Transactions

Use a Memorized Transaction

Schedule a Recurring Transaction

Change Memorized and Scheduled Transactions

Remove a Memorized Transaction

Set Reminders Preferences

Use Reminders

A memorized transaction is a transaction to which you assign a name , such as a report you have prepared, a check you have written, or a form that you have filled in. You can recall and repeat the transaction without typing all the same information each time, which makes your work more efficient. When you take the time to create a form or a report that you plan to use again, remember to use the memorization feature to save it. A great side benefit of this feature is that the forms can then be made accessible to other QuickBooks users at your company to simplify their work as well.

If several transactions go together and are used repeatedly, you can memorize all the transactions as a group, and then execute them all together.

Do you want to take this simplification technique one step further? Set up your memorized transactions as recurring transactions and QuickBooks will do the work for you. With recurring transactions you can have a reminder sent to yourself letting you know it's time to execute a transaction, or you can have QuickBooks perform the whole transaction for you. How easy is that? QuickBooks can send invoices automatically, issue purchase orders, and even pay bills.