QuickBooks is an outstanding accounting software geared for small and medium size business houses to cater to their financial needs like business payments, managing and paying bills and QuickBooks payroll functions. QuickBooks also has additional features of assigning tax categories to various products and services as it knows which tax to be applied to your kind of business and set them and automatically track them.
This means that one need not worry to select a tax rate when one creates an invoice or other transaction, as long as sales Tax center and applicable tax agencies are set up , the system will automatically calculate the tax rate.
How QuickBooks Calculates Sales Tax
The main benefits of automated sales tax using QuickBooks financial software is that one need not select the tax rate. It will be by default set up once the invoice or other transaction is created. QuickBooks new sale tax features considers following information for calculating sales tax.
- The permanent address of the business.
- The physical address that is to be mentioned on invoice or sales receipt.
- Mapping the product associated with your business products or services that one is selling.
- The state where one has registered to collect sales tax.
Steps for Setup Automated Sales Tax in QuickBooks
In QuickBooks followings steps need to followed in order to setup automated sales tax :
- To set up automated sales tax first of all one need to enable the sales tax preference.
- Select the option (Taxes Set up sales tax ) as shown on the left hand side of tab
- In next step one needs to verify address which need be correct as tax calculation is based on address :
- If address is correct select option “Looks good”
- If modification is to be made , click on “Pencil icon” to make changes.
- In the next step if it will ask for- from where tax to be collected outside of home state, which is beneficial to determine the tax agencies to be set up. Click on option (Yes or No).
- In case tax is to be collected in home state, further information needs to be furnished like :
- When is the current tax period started?
- How often ones business files sales tax returns?
- When collection of tax for the current agency started?
- If one needs to collect tax from multiple states, one needs to furnish more information for other agencies you pay. Here select “Add Agency” to set up all the other agencies with which business is registered with.
- In the last step, QuickBooks will work on calculating tax rates and setting up agencies. The screen will confirm the set up is complete. Select the option “Got it” and it will take you to sales tax page.
When One Trades with Customer of Different States
When business house operates in different states, the customers using the products are bound to be scattered in different cities . In this situation, the tax rate may very totally depending on which state business is located and which states its being sold. In this case, one needs to get in touch with state tax authority for specific information. Rules are:
- No presence in state, then no sales taxes to be collected.
- Each state will have defined sales tax rules, hence local tax authority to be contacted for clarification.
Our QuickBooks Technical Support Services
If you want to get the most efficiency out of QuickBooks program you need to set up and use your sales tax items properly. The number of sales tax you collect varies from state to state and location to location. Each state sets a sales tax rate, and it keeps on varying with counties, cities, other localities and even special taxing districts can set their own rates if required.
Why Accounting Problem
If you need any further information related to QuickBooks products and services, unable to understand the process, please contact our QuickBooks Technical support experts for instant QuickBooks helpline number. Our toll free QuickBooks Enterprise Support Number.