I checked your blog – but didn’t see any post on why people SHOULD always be sure to run sales tax payments through the proper workflow.
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If sales tax is paid through Vendors > Enter Bills or Banking > Write checks instead of Vendors > Sales Tax > Pay Sales Tax, it won’t clear the sales tax payable off the sales tax liability reports or the Pay Sales Tax window. If you use the Sales Tax Payable account on a check or bill, it will result in the correct amount showing on the regular balance sheet reports, but not on the sales tax liability reports. Crazy, isn’t it? No wonder people are so confused. If the check hasn’t been included in a checking reconciliation yet, you can just delete it and write another check through the Vendors > Sales Tax > Pay Sales Tax. If the check has been reconciled, open the check or bill (if a bill was entered first), make sure the account used was sales tax payable, and enter the sales tax vendor in the customer:job box. Then go to Vendors > Sales Tax > Pay Sales Tax and you’ll not only see all the positive amounts payable plus a negative amount for the amount that was paid. When you check them off, the check should equal $0 so there’s no affect on your checking account.
In the newer versions of QuickBooks, there’s actually two warning messages that popup when you try to write a check for a sales tax liability—first when you select the sales tax vendor and then again when you select the sales tax payable account. But many people check the Do not display this box in the future box when it pops up the first time so it never pops up again. You can, however, turn them all back on by going to Edit > Preferences and clicking the box next to Bring back all one time messages.
This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice. For further information, please consult appropriate professional advice from your attorney and certified public accountant.
Written by +Ruth Perryman, CMA, CFE, CFM, MBA
Ruth is the president of The QB Specialists, an Intuit Premier Reseller that offers huge savings and expert advice on QuickBooks POS and QuickBooks Enterprise. She is an Advanced Certified QuickBooks ProAdvisor and a member of Intuit’s Trainer/Writer Network. She is also certified in QuickBooks POS and QuickBooks Enterprise and has provided expert QuickBooks help to thousands of businesses all over the world since 1996.
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