How to Adjust Sales Tax Payable in QuickBooks?

Sales tax is collected in the aggregate amount of tax that is collected from customers during the sales on behalf of the government. It is very important to follow the sales tax regulations of the local and out-of-state tax agencies for all types of business. The owner of the business needs to track the taxable and nontaxable sales separately.

QuickBooks offers a useful feature to its users which they can adjust their sales tax according to the tax authorities. In this article, we will teach you how to adjust sales tax payable in QuickBooks. So  you can report your sales tax summary without any issues

Sales Tax Adjustment in QuickBooks

If you are using automated sales tax in QuickBooks then it is easy to add or delete the sales tax adjustments in QuickBooks. You can easily adjust the sales tax whenever you receive a tax credit, discount or fine with the help of automated sales tax.

Add Sales Tax Adjustment

Step 1: Create an account for sales tax Adjustment

• Fix an expense account where you need to increase the due sales tax, on the other side create an income account when you need to decrease the sales tax. It is useful to create an appropriate account.
• Go to the gear icon at the top right corner.
• And now income or expense from the account drop-down menu.

Income Account: Choose this, if you want to decrease the sales tax.

Expense Account: Choose this, if you want to increase the sales tax.

• Then click on details.

If you want to use the income account then, click on the sales of product income

If you want to use the expense account then, click on the taxes paid option

• Name your account such as sales tax adjustments
• after reviewing, select save and close

Step 2: Add an Adjustments

Go to taxes and then click on the sales tax tab from the navigation bar.

• Then, select the tax period which you want to adjust and then click on view return.
• Select add an adjustment and the reason for the adjustment.

After that, choose the account if you want to make the adjustment. After submitting the adjustment, select the add option.

Delete Sales Tax Adjustment

QuickBooks offers you various options to delete the sales tax adjustment if the adjusted tax is wrong or mistakenly added

• Go to the gear icon at the top right and then click on the chart of account option
• Here find the expense or income account in which you want to delete the sale tax adjustment
• Next, select the run report and then click on the adjustment you want to delete
• Then click on delete and confirm the same

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Adjust Sales Tax in QuickBooks Desktop

In QuickBooks Desktop when you make a change to sales tax you transfer money from and to the Sales Tax Liability account. Therefore it is necessary for you to know when and how to adjust sales tax payable in QuickBooks Desktop

Here are the reasons why you should adjust the sales tax

• When the Sales Tax agency has offered you any type of discount
• When a fine is charged to you by the Tax authority due to late or nonpayment of sales tax
• If you want to make corrections in the previous tax period
• When QuickBooks and sales tax forms don’t match

Adjusting the Sales Tax in QuickBooks Desktop

• Choose the vendor option and then choose the Sales Tax
• Next, you can click on the Adjust Sales Tax Due. A new Sales Tax Adjustment window will open
• In this window enter the adjustment date class sales tax vendor and adjustment account
• then select if you want to increase or decrease sales tax and enter the amount
• In memo, you could write sales tax adjustment for reference
• finally, after reviewing the information click ok

We hope that you have understood how to adjust sales tax payable in QuickBooks or Quickbooks Desktop. It helps you manage and report the sales tax to the official authority in the best way.