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In this article you will learn to troubleshoot issues or unexpected results you may come across while you manage your sales tax in QuickBooks Desktop. To know more call QuickBooks Customer Support.

Even though the sales tax feature is not turned on, invoice prints “T”

Important: Even though the sales tax feature is not turned on, invoice prints “T” next to taxable amount

The Possible reason behind this is the damaged invoice template

Pro-tip: You will have to recreate your invoice template.

Solution 1: By creating a new template

  • Select Templates from the Lists menu.
  • Select the Templates drop-down at the bottom in the Templates window and then click on New.
  • Select the template type and then click on OK.
  • Give a template name and then save your customization.

Solution 2: By duplicating the template

  • Select Templates from the Lists menu.
  • Select to highlight the template you use for the invoice In the Templates window.
  • Click on the Templates drop-down present at the bottom and then click on Duplicate.
  • Choose Invoice in the Select Template Type window and then click on OK.
  • Use the duplicate template by opening an invoice.

Solution 3: BY defaulting to the copy of the template

  • Select Templates from the Lists menu.
  • Double select the Invoice template in the Templates window.
  • Select Additional Customization from the Basic Customization window.
  • On the dialogue box that appears, click Default > OK.
  • Click on OK.
  • After using the Write Checks window to pay sales tax if the Sales Tax Payable is incorrect

Pro-tip: Always make use of the Pay Sales Tax window. While recording a payment for sales tax do not use Write Checks.

Recommended: Use Client Data Review do not use Write Checks if you are using QuickBooks Accountant or Enterprise Accountant. Follow these steps for all other QuickBooks editions:

Backing up your QuickBooks company file

  • By going to the Bank Register that you used to make the payments find the incorrect sales tax payments
  • Re-enter the sales tax payments.
  • Select Sales Tax from the Vendors menu and then click on Pay Sales Tax.
  • Choose the one you want to use for these tax payments in the Pay from Account if you have more than one checking account
  • To make sure you have enough money in the checking account to make the sales tax payments check the Ending Bank Balance at the bottom of the window. Choose a different checking account if it doesn’t happens.
  • Enter the date of the sales tax payment in the Check Date field. To start with, look for the oldest payment first.
  • Change the date to the end of the payment period in question under Show sales tax due through.
  • Type the check number used in the original payment in the Starting Check No. field.
  • Check to select the items you want to pay in the Pay column.
  • (This step is Optional) Select the amount in the Amt. Paid column if you need to change the amount for any of the items, and then make the change.
  • Check whether the total amount matches to your original payment and then click on OK.
  • You will see a message on your screen, “Problem: Another Check already has number [xxx]…”, click on Keep Number.
  • Repeat steps for each payment before proceeding if you have more payments to enter.
  • From other areas in QuickBooks, remove the original payment transactions.
  • Select Chart of Accounts from the Lists menu.
  • When you re-enter the payment you used a bank account double select it.
  • The sales tax payment that you wish to change, scroll to that date.

Please note: You should see the entries near each other since the date on both the original and the re-entered payment is the same.

  • TAXPMT type is the re-entered payment. Put a check mark on the TAXPMT entry then select Record if the original payment already cleared your bank account.
  • From the Edit menu, select the original sales tax payment (CHK/CHK type) and then select Delete Check. Please Note: You need to delete the bill to keep it from appearing in the Unpaid Bills Detail report if you originally entered a bill and created a bill payment check (BILLPMT type),
  • For each sales tax payment that you have re-entered repeat steps given above.
  • Check the problem that is to be solved.
  • Through the current date, run a Sales Tax liability report and then compare it against the balance of the Sales Tax Payable account.
  • For each tax agency by running the Vendor Balance Detail report, check the vendor balances.
  • To ensure there are no duplicate payments, run the Transaction List by Vendor report.

Please note: For the sales tax account, you must specify a vendor name

Pro-tip: When you create a journal entry or write a check that uses sales tax payable account you need to enter a vendor name in the Customer: Job column.

  • On the cash basis Balance Sheet report, negative sales tax payable

Please note: For sales tax payable indicating that the state/province owes you money your cash basis Balance Sheet shows a negative amount.

Pro- Tip: Make sure that QuickBooks is set to the proper basis. Please note: To ensure you are paying your sales taxes on the correct basis you may need to consult your accounting professional and the Department of Revenue/Canada Revenue Agency

Follow the steps given below to set Sales tax basis in QuickBooks:

  • As the administrator, login to your company data file.
  • Switch to single user mode.
  • Select Preferences from the Edit menu.
  • Select Sales Tax in the side bar from the Preferences window and then click on Company Preferences tab.
  • Select the appropriate basis for your company in the, In the When do you owe sales tax? section.
  • Click on OK.

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Affecting a Sales Tax Group by Inactive Sales Tax Items

Pro-tip: A Sales Tax item is not removed from the assigned Sales Tax Group when it is set to Inactive. The active sales tax items can be applied properly when the inactive sales tax items are removed from the Sales Tax Group

  • Select Item List from the Lists menu.
  • Double-click on the Sales Tax Group .
  • Highlight the sales tax item that you wish to remove and then click on CTRL+Delete.
  • Click on OK.

Please Note: With the previous Sales Tax Item, if there are invoices that were already created using the Sales Tax Group. This change will not affect how those invoices were calculated.

Correcting error occurring while trying to create a Credit Memo

Please note: From an invoice, create a credit memo or from the Customers menu and you may receive a warning which says “Error.”

  • The reason behind this is the invoice which includes a sales tax item. Whereas, in the company file the Sales tax setting has been turned off.

Pro-tip: You need to turn on Sales Tax to properly create the Credit Memo, create the Credit Memo and then again turn off Sales Tax:

  • In the company file, turn Sales Tax on:
  • Select Preferences from the Edit menu.
  • Choose Sales Tax from the left pane then select the Company Preferences tab.
  • Click on the Yes radio button ‘Do you charge sales tax?’
  • Create a Credit Memo.

By following directions in Step 1 and selecting No for “Do you charge sales tax?” turn off sales tax in the company file.

Please note:  It cannot be deleted as it is used in a customer data

Details:  You get the error “Warning, this item is used in a customer data. It cannot be deleted.” When you are deleting a sales tax item

The reason behind this is the sales tax item(s) that you want to delete are assigned to at least one customer in the Additional Information tab of the Edit Customer screen.

Pro-tip: You can delete the item if the sales tax item has not been used on a transaction and is not assigned to any customer.

From your customers using the Customer Contact List report remove the sales tax item, follow the steps given below:

  • Select List > Customer Contact List from the Reports menu.
  • Click on Customize Report.
  • Select Tax Item from the list of available columns.
  • By drop-down select sort and then select the Tax Item to sort the report and the  find the customer(s) associated with this item easily.
  • Click on OK.
  • In the Tax Item column, double-click select any customer with the appropriate sales tax item.
  • Go to the Sales Tax Settings tab in the Edit Customer window.
  • Remove the tax item from the Tax Item field you need to delete or choose another sales tax item.
  • Repeat the steps given above for all customers that are associated with the sales tax item.
  • You can delete the item once it is no longer associated with any customers.
  • Choose Item List, from the List menu.
  • Right-click on the sales tax item and then click on Delete.
  • While printing the invoices, the sales tax line item does not appear

Pro-tip: To print as an individual line item in order for sales tax on an Invoice there should be a description in the description field  about the Sales Tax item given in the Item List.

  • Add description about the sales tax item:
  • Select Item List from the Lists select menu.
  • The Sales Tax item that does not appear on printed invoices double-click on them.
  • Type Sales Tax or the description for the Sales Tax Item in the Description field as you want it to appear on the Invoice after being printed.
  • Click on OK.
  • To pay your sales tax due, your existing credit with [Vendor Name] is sufficient

Details: In the Pay Sales Tax window, paying sales tax and selecting a sales tax item and a discount that is entered in the Sales Tax payable register will show you message “Your existing credit with [vendor name] is sufficient to pay your sales tax. A check will not be written for this vendor.”

Possible reasons behind the same:

  • A sales tax discount is not for the same Vendor name as for the Sales Tax Item
  • A check is not printed but it records the payment in the Sales Tax payable register for the full amount and does not apply the discount while applying for the discount to the amount due in the Sales Tax window.
  • Solution recommended
  • Choose Chart of Accounts from the Lists menu.
  • To open its register, double-click select Sales Tax Payable account.
  • Select the payment to find the sales tax payment just entered.
  • Select Delete Sales Tax Payment from the Edit menu and then click on OK.
  • Now, leave the Sales Tax Payable register open.
  • Choose Sales Tax from the Vendors menu and then click on Pay Sales Tax.
  • Check whether the discount does not have similar vendor name to the sales tax item. Please note the vendor name on the sales tax item.
  • To close the Pay Sales Tax window, click on OK.
  • Move back to the Sales Tax Payable register.
  • To match the vendor name associated with the sales tax item, find the discount and change the vendor name.
  • To save the changes, click on record.
  • Choose Sales Tax from the Vendors menu and click on the Pay Sales Tax.
  • Under the Pay column present next to the correct items put a check to choose both the sales tax item and the discount item.
  • To close the Pay Sales Tax window, click on OK.

To know more on how to manage sales tax in QuickBooks desktop, call on our QuickBooks customer support number. You can also write to us at support@quickbooksupport.net. For more information visit, www.quickbooksupport.net .

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