Sales Tax Adjustments

by Becky
(Tacoma, WA )

Sales tax rates changed in January for some of the counties we do work in. We collected the correct rates and paid the correct rates, but I neglected to change the rates in QuickBooks. Now many of my sales tax due amounts are incorrect. How can I adjust individual Sales Tax Items?


Jennifer replies:

I need some clarification because I don’t understand something.

If you collected and paid the correct rate, how is it that QB shows an incorrect sales tax due amount? That doesn’t make sense to me.

It sounds like somehow you keep track of your sales and sales tax outside of QB, then record them in QB after the fact, at a later time. Is this the case?

If this is the case, then it sounds like you’ve been recording the Invoices (or Sales Receipts) using the old, outdated, sales tax items…. this explains why QB shows an incorrect sales tax amount due.

Well now, wait. Let me do this. Instead of me trying to figure out your process, I’ll just answer your question as you stated it. Let’s see…. you asked:

“How can I adjust individual Sales Tax Items?”

You have two choices: you can either change the rate of your existing sales tax items, or you can create new ones.

I’d create new ones and make the old ones inactive, but the choice is yours.

If you want to change the existing items, just go to your Item List, locate the sales tax items you want to change, open them, and change the rate.

Changing the rate of existing sales tax items will not alter any invoices/sales receipts you already have in QB.

So if I’m right that you’ve recorded invoices/sales receipts using old sales tax items, you will need to create new sales tax items, go back to those invoices, and enter the new sales tax items in each invoice/sales receipt. That’s what I would do.

Might be a pain in the neck, but the sales tax “module” of QB is rather inflexible. It’s best to enter things the right way rather than trying to take short-cuts.

If you want more help with this, let me know.

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