Sales Tax Adjustments

I'm in a similar situation with the sales tax being split up into several items. The sales tax collected, the sales tax on items taken from inventory for business use, the items taken from inventory for personal use and the personal items purchased out of state. I've found you can circumvent just about all of QB predefined way of doing things by using journal entries. I think QB and all canned software addresses the usual and normal but lacks things for the unusual situations. I would guess that's why they have the option of making journal entries.

Bob

Don't you now see a third line show up with the total amount of both adjustments?

The concept of a journal entry has been around for hundreds of years. It is a fundmental basic tool used in accounting.

Bob,

Thanks for the reply. Well .... journal entries are for when you don't know how to do it any other way. For me, they are to be avoided because it generally means that I made a mistake that needs fixing or that I don't quite know what I'm doing with Quickbooks. Further, it requires me to *think* harder than I'd like - because the results can be error prone.

As an aside, here's how I generally do it:

If I'm not sure if a value in a transaction should be positive or negative then, after entering the transaction (perhaps arbitrarily as a trial), I look to see the change in the accounts affected. Now, I *know* what they should be (almost always) and can change the signs in the transaction if necessary.

I use Quickbooks to avoid Journal entries.

In the mean time, I don't think my situation is all that weird. The company is a retailer that sells taxable services and products. Pretty straightforward. The only slight twist is that sales tax can be split between State and Local - and I don't think that's so unusual. Then there are the occasional non-taxable sales but they don't figure into this discussion at all.

My main issue is that the State gives unexpected and overall tax credits that cause adjustments to be necessary after the fact. I'm having a very tough time getting Quickbooks to make the adjustments in any reasonable fashion.

Fred

Alan,

Yes, I do. But the adjustments don't seem to affect the accounts as I expect and I don't arrive at a check amount that matches what's needed. I don't mind too much *how* it's done - whether State and Local are split (although that's what I was mostly trying to do - adjust them separately). Nothing seemed to work.

(brief pause)

OK - I just paid the sales tax for Q4 2005 and now I want to get to zero owed as of 12/31/2005. Here goes:

In the Pay Sales Tax window: The Show sales tax due through date is 12/31/2005 just as I want... I click on Pay All Tax just for fun. The amount comes out (-$120.69). There are seven entries in the window with 4 different "vendors" amongst those 7 entries - a couple of them are the State with 2 different vendor names. I would like for *all* those entries to go away because no taxes are owed and no refunds are due to/from any of them.

Reading this long list doesn't help me understand what I'm doing when I pay the tax - since it's meaningless at this point, I want it to go away.

How can that be done? If I "pay" the tax I'm afraid it will mess up the account balances because these are just bogus numbers.

Thanks,

Fred

Your problem is that after you made the adjustments you did not select the adjustment line along with the other lines when making the payment. Had you done so the amount paid would have been correct.

Alan,

OK - now I get it and it worked.

Thank you,

Fred

In addition to which, in the future you can pay any amount you want against the accruals. Rather than simply selecting one or another of the accounts, enter the amount you wish to pay to the right of the Quickbooks amount. The payment will be posted correctly this way and you can make adjustments at another time.