sales tax qbo

Hi there, Linda Artesani, Artesani Bookkeeping. I know I've been a bit of MIA here with my tutorials, so I'm going to try to get back on schedule in a better way, especially as we start to wrap up the year 2017. Today I'd like to talk about sales tax in QuickBooks Online. So it's been updated recently and it's easier for you to collect and track, so I wanted to go into that right now. So I'm going to open up my sample company. So there's one spot where you can actually see where your sales tax is placed. It's also a place where your payroll tax would be. Just hit Taxes right here on the left-hand toolbar. I don't have payroll in this account, so it's going to say Set Up Sales Tax. That's a simple way to set it up. You have the ability to enter multiple sales tax rates, including combined rates. That's a new feature that's fairly recent. You can view your sales tax liability reports in QuickBooks Online very simply. I'll show you how to do that. You can customize the date, the agency, and a lot more. It's easy to record the payments so you can see them. One caveat here, if you converted your file from the desktop to online, it doesn't use the sales tax accounts you had. It creates new ones, and that can kind of make a mess of your sales tax. So first of all, you want to know exactly, you know, you know what state you live in, what is the rate? You know, you need to know a little bit of a background and maybe an explanation of your rates so you understand them. And the best place to find that out is to go to your specific state and go to your Department of Revenue. They'll have something there. Sales tax is a fee charged by the government for the sale of products and services. You're their agent. You're holding the money for them. So you're acting as their agent, collecting it and holding it and sending it to them. And the fee is generally a percentage of the price of a product or a service that you sell. It depends on your state. Some states don't tax services and some do. Some tax at different rates for different items. It can get kind of complex. So there are other apps out there that will help make this a lot simpler for you. I like Aloe Vera. It's a good one for states that have multiple tax rates, and it all works in itself to do that configuring for you. I mean, you can do it in this program as well. So the first thing you need to do is go onto your state's website, especially if you're selling in your own state. If you start to sell outside your state lines, you'll need to find out the requirements for the other states. But you just first need to know, are your products or your services— do they require sales tax? That's your number one thing. And then find out what your rate is. Here in Florida, it's 6%. I came from Rhode Island, it was 7%, so it's a bit of a break even though it's a bigger state. We do depend on our sales tax here for paying for things because we rely heavily on tourism. You need to know what agencies you need to pay. So if you're dealing with multiple states, you need to know what's the address and the name of the agency that you pay and then how often. So depending on what each state's guidelines are, you may pay monthly, you may pay quarterly, Quarterly. It depends on how much. So it's a good, good thing to check, and I'll put this in the notes, you know, where you can find the website for your state. You know, we have— Florida has got a really great online presence. I know that states like Rhode Island do not. So sometimes it's kind of like trying to find it in their website's very difficult compared to Florida, which is just right there. It's done much better than the state of Rhode Island. And then you just need to know how the sales tax is calculated, and you're going to start putting that on your invoices or your sales receipts. So we're going to set up a sales tax, very simple one here. It's going to ask me, is this my address? So I'm going to say yes, it looks good. And they think it looks good to them too. Some of the corny messages on QuickBooks, kind of annoying. Do you need to collect state outside of Florida? So I can select yes or no here. I live very, very deep into the state of Florida. There's not a chance. I'm not near the the boundary line where I'd be crossing the state line like I was in Rhode Island, where I would cross into Massachusetts or Connecticut to work. I actually work mostly in the state of Florida. I actually work all in the state of Florida, and fortunately my services aren't taxed. But we're going to just say for this purpose that it is only Florida. And so it automatically found for me the Florida Department of Revenue, which that is the correct tax agency. And then I want to start my tax period. It's November, so I'm just gonna say my tax period started in October. Filing frequency, it depends. Once you file, you have to file for a permit, and when you get that information, it will tell you. I'm gonna say for this purpose it's monthly, and the start date I'm gonna say was 10/1. So from there, if I had more agencies to pay, say I had an agency that was maybe the Lee County Tax Agency, I could add it here, or I can just go on to next if I don't have any other agencies. So simple tax returns or simple sales tax is very easy. So it's calculating for me. It's actually going to find it and it's already set it up. So that's really nice. It didn't used to do that and that's another nice feature. It shows me when my sales tax is due. The due date is November 20th, which is correct. And now I'm here. Now I haven't put any taxable sales in. I haven't made any products or services on this particular account. So let's try that first. Let's go here. And I've got to make a customer, so I'm going to make a customer. I'll just give the name Fred Smith, good enough. And I'll add him as my customer. Now I'm going to create an invoice for him. And I'm going to create a product that I sold to him that's going to be taxable, so I'm going to say widgets. I don't have it set up. It's going to ask me to set it up. It's not an inventory thing. I'm going to say it's taxable. Tax agency is— it's taxable. Sales tax category is retail. Taxable retail items. And then if you collect it, you purchase it from a specific vendor all the time, you can put that information here. Sales rate. Sales price I'll put as $10. I'll put it in my income. It's just a widget. Oh, I didn't spell widgets right. No wonder it's underlined in red. Okay, so it's a widget. That's better. Perfect. Now I've got a taxable item entered. I sold something for $10. I collected 60 cents from my government agency, and when the customer pays me, they're going to pay the $10.60, but I owe the state of Florida 60 cents. So let's go back to my sales tax, our report in sales tax. So now you can see that I owe the state of Florida 60 cents, and it's due November 20th. So I'm going to hit— I'm going to hit View Return. What's nice about this is, this new feature, is it's going to create my return for me. If I was going to record the payment, I would have already clicked on the state's website, found that page, saved it, and bookmarked it, which I do have bookmarked up here. Florida sales tax. So I already have it bookmarked on my toolbar of giant toolbars, but you can find it here once you're all set up. File and Pay, Sales and Use. It's basically going to take me to that spot, and then I would pay my sales tax here. I'm going to try again to record the payment. Try again to pick today's date. Try again to pick my bank account. And then I would put in here October 2017 sales tax. Okay. So it's updating my return. It's showing that I paid my sales tax. Now, it shows my sales tax due date in there perfectly. I'm going to hit Close. What I like to do now is when I've created my return here, there's a way to print the page at the very end. So I saved that payment. So once I've processed my sales tax return on the actual Florida Department of Revenue site, create my payment, get my confirmation page, I print that page. The problem in QuickBooks, and I will show you, we'll go to Banking and I'll go to my register here and I'll see my 60-cent payment. It's right here. If I edit it, it comes up as a sales tax payment and I can't, I cannot come on here and add Add a PDF to keep it with it. So what I'll do is I'll actually come over and make a check, and it's going to be a zero check. So I'm going to come to Florida Department of Revenue, which is not in here because it's my, it's my dummy company file. And then here I'm just going to put it in as a miscellaneous expense. It's not really here. Record. Sales tax payment receipt from FL DOR. And then what I would do is take my payment, drag and drop it because I have printed it to a PDF, and I'll drag and drop it and attach it here. So I will make a zeroed out check. I'll save the check as zero, and I can attach here Pretty much anything if I wanted to, just drag it in here, pretend that's my paper, and I've attached it. Save and close or save and new. I won't put print, I'll put ACH here because I paid it online. And basically I'm just using this Xero check as a way to attach my actual payment confirmation from the state. So yes, I will have 2 entries in my register, one right here, Florida Department of Revenue, and then this is the actual payment that's created through the sales tax module. Of my program on QuickBooks Online, but unfortunately there's no way to add an attachment. So I create this zero check and date it the same and put it there, and that'll have the payment details. So if I'm ever audited or I need to prove a payment to the state, I now have a way of attaching that to my check here, and I put it together so I can find it easily. It would be nice if we could have a place to attach that to the actual sales tax payment that's generated in QuickBooks. Hopefully Intuit, you're listening. That would be nice to have a little place to attach it so I don't have to make the zero check, but that's my workaround. So hopefully that is easy enough for you to understand. I think that many times people struggle with sales tax. I'll get into this more in a future tutorial on how to do the compound tax rates. It's a pretty nice feature of QuickBooks Online that they don't really Well, they have a desktop, but it's a little different. This is so much easier because it actually helps you set it up. So I'll do that in a subsequent tutorial. But I hope that just seeing how this works— this is new— I hope it's helpful. If you have any questions, please reach out to me on Facebook. I will put a— provide a link in this page on my blog so you can reach back to my blog as well. Thank you for listening. Bye now.