17 Nov Sales Tax Return Clean Up
QuickBooks Tips & Tricks – Sales Tax Return Clean Up
To make sales tax return preparation as efficient as possible, the invoicing and sales receipt procedures become very important. This includes which items are taxable or not, which customers are taxable or not, and how the subtotals on the report should be to make the most sense.
With version 2002 the sales tax liability reports were improved to include subtotals and the ability to drill down on the taxable and non-taxable sales. This has gone a long way towards providing the detail reports needed by small businesses that charge, and therefore must report, taxable sales and sales tax collected. One of the nicest features available with the new format is the ability to drill down on the detail then subtotal by item to determine why an amount is non-taxable. Here are three thoughts to get you started.
One of the nicest features available with the new format is the ability to drill down on the detail then subtotal by item to determine why an amount is non-taxable.
Some planning with the reports in mind can be helpful. For example, if the government, out of state, etc sales tax items do not have a vendor (since these amounts are typically non-taxable) entered when the item is created, they will show as a separate subtotal on the reports. If the items are changed to non-taxable as the invoices or sales receipts are created this will also help to make the subtotals accurate without the need to recalculate.
Reconciling the sales tax liability report to the Profit & Loss is also helpful to determine if there are items that have not been coded to an income account, if there are items that have not been marked for the advanced job costing feature (this pro only feature provides a purchase and sales column for two different accounts when the check box in the middle of the edit or new item screen is marked. Keep in mind that there may be some reconciling items such as customer down payments that will show on the sales reports but not on the Profit & Loss reports.