11/13/2022 0 Comments Quickbooks 2013 webinarTax Groups are used when you collect multiple taxes that are paid to SEPARATE tax agencies. You should set up tax items for each individual tax you need to track, along with the rate, and agency to which you pay that tax. Sales Tax Items are about the rate of tax to be charged, and which tax agency collects that tax. An item called NON would not give you enough information when looking at your sales tax liability reports. You should not have a Sales Tax Code called “NON” (Non-Taxable), because each non-taxable Sales Tax Code should specify WHY a customer, or an Item is not taxed. The third purpose of Sales Tax Codes is to track revenues according to which tax is charged (or not charged). Then, assign the Sales Tax Code SRV to your service Items. For example, if you do not charge sales tax on services, you should create a tax code called SRV (for service). The second purpose is to tag certain sales items according to whether they are taxed or not. If you sell to resellers, you will want to define a tax code of RSR (for Reseller). For example, to track revenue from your out of state customers, you’ll should create a tax code called OOS (for out of state). One purpose is to describe whether each customer is taxable or not, according to where they live, or what your business relationship is with that customer. Sales Tax Codes are used for three purposes. As you think about how to set up and record sales tax in QuickBooks, keep in mind the following concepts: When you set up Items in QuickBooks, you assign a Sales Tax Code and Sales Tax Item to each Item. When you set up customers (the “who”) in QuickBooks, you assign a default Sales Tax Code and Sales Tax Item to their customer record. The ultimate goal of QuickBooks sales tax tracking system is to properly calculate and collect sales tax and to properly report revenues tax collections, and tax payments in two two-dimensional reports called Sales Tax Revenue Summary and Sales Tax Liability. QuickBooks’ sales tax tracking features help you track the “who, what, why, where, and how much” of sales tax.
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