QuickBooks can manage sales tax reporting and remittances to tax authorities automatically, making a tedious and sometimes stressful task quite easy to accomplish. The sales tax feature of QuickBooks must be set up correctly, however, or it could cause more headaches than it solves if you end up under- or over-paying, or paying late.

Using QuickBooks for sales tax reporting involves setting up Tax Codes, Tax Items, and Tax Groups, and then assigning these to customers. Tax Codes allow you to differentiate between those customers that are taxable and those that are exempt. Tax Items are the description of a particular tax, including the rate and the entity that should be paid. Tax Groups allow you to break down sales tax reporting and payment by individual entity, as in the case where you collect 8 percent tax with 1 percent going to local government and the balance going to the state.

QuickBooks enables remittances to be made from a specified bank account. Each jurisdiction will dictate the frequency of these payments, usually in correlation with the amount of sales tax you have collected within a certain “look-back” period. Taking the time to thoroughly research the tax laws in your area with the help of an attorney or accountant can help you pay on time and avoid fines.

The sales tax reporting functionality of QuickBooks is robust, but might be complicated to set up initially. Due to the importance of managing correct sales tax figures and the potential liability with government entities should errors occur, we recommend a consultation with a certified QuickBooks expert to set up your reporting and payment features.

Net Plus Consulting provides expert QuickBooks solutions to business customers nationwide. Please contact us via our website or call (212) 461-3300 for a free, no obligation consultation.