Set up and use automated sales tax in QuickBooks Online

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learn how to set up and use the automated sales tax feature in quickbooks online.

quickbooks can automatically do sales tax calculations on your invoices and receipts for easy and accurate filing. then, it lets you know when your tax payment is due, so you can file on time and avoid additional fees.

You are reading: Quick books sales tax

Here’s how to set it all up and get started:

Step 1: Learn how Quickbooks calculates sales tax
Step 2: Tell Quickbooks where you collect sales tax
Step 3: Add tax categories to your products and services
Step 4: Double check your customer information
Step 5: Track Your Customers’ Sales Tax
Step 6: Check How Much You Owe and Why
Step 7: File your sales tax return

We’re rolling out automated sales tax for all quickbooks users. If you’re still using manual sales tax, we’ll help you switch to the new sales tax system as well.

If you want to manually track sales tax, you have the option to use custom rates on invoices and receipts. You can use custom rates to manually track special taxes like meals or excise duties. or use custom rates if you feel more confident tracking sales tax manually.

To see more instructional videos, visit our videos section.

step 1: learn how quickbooks calculates sales tax

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quickbooks automatically calculates the total sales tax rate for each sale based on the following:

your customer’s sales tax exempt status.
where you sell and where you ship to.
the sales tax category of your service or product.

Learn more about how quickbooks makes every sales tax calculation accurate.

step 2: tell quickbooks where you collect sales tax

quickbooks online tracks your state’s tax laws to accurately calculate sales tax and returns. If you collect sales tax outside of your state, you can also add other tax agencies to which you pay.

There are two ways to configure where you collect sales tax:

if you just signed up for quickbooks, set up where you first collect sales tax.
if you still use manual sales tax, check if you can now switch to the new sales tax system.

step 3: add tax categories to your products and services

Rules on how to tax a product may change depending on where you sell. Check out our blog on how the sales tax on a lemon can change depending on the final product and where it is sold.

When you’re ready, you can assign sales tax categories to everything you sell. this lets quickbooks know how much sales tax to charge based on exactly what you’re selling.

Step 4: Re-verify your customer information

Tax rates may also change if you ship products or provide services to your customer’s address. Not all customers are required to pay sales tax, such as churches, schools, and other nonprofits.

Make sure you have the correct tax status, billing address, and shipping address for your customers. Here’s how to double check your customer information in quickbooks.

Step 5: Track Your Customers’ Sales Tax

When you’re done setting things up, you can start using the automated sales tax feature. we’ll show you how it works and where you’ll see it when you create an invoice or receipt for your customer.

step 6: check how much you owe and why

Get a detailed look at what taxes you owe and why you owe them. this helps you make sure everything is correct before you file and pay your sales tax return.

Learn how to run the sales tax liability report to view your sales tax information at any time.

Step 7 – File your sales tax return

quickbooks online keeps track of your payment due dates in one place so you can avoid late returns and additional charges. Once it’s time to file, review what you owe to make sure everything is correct. then you can file electronically at your tax agency’s website or mail your return. After you file your return, you can track your new sales tax payment in QuickBooks to keep your records up to date.

Learn how to file your sales tax return and record your tax payment.

Automatically save for your sales tax liability by using quickbooks to check your sales tax smart envelope.

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