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Set Up Sales Tax in QuickBooks Online – Instructions

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Set Up Sales Tax in QuickBooks Online - Instructions: A picture of a user setting up sales tax agencies in QuickBooks Online.

Set Up Sales Tax in QuickBooks Online: Overview

           To set up sales tax in QuickBooks Online, click the “Taxes” link in the Navigation Bar. Then click the “Sales Tax” tab in the page that opens to the right. Alternatively, hover over the “Taxes” link in the Navigation Bar and then roll over and click the “Sales Tax” link in the side menu that appears to also open the same page. Then click the “Set up sales tax” button that appears in the “Sales Tax” page the first time you open the “Sales Tax” page to open a “Set up sales tax” wizard in a new window.

            In step 1 of the “Set up sales tax” wizard, enter your company’s physical address into the “Business address” fields to determine your default sales tax agency or agencies. Then click the “Next” button to continue.

            In step 2 of the “Set up sales tax” wizard, it asks if you need to set up sales tax for regions outside of your company’s physical location address. Select either the “Yes” or “No” option, as needed. If you select “No,” then the associated tax agency or tax agencies appear below in the window.

            If you select “Yes,” then the initially selected tax agency or agencies appear at the bottom of the window along with a “Select an agency” drop-down. Use the “Select an agency” drop-down to select the tax agency for the different state, county, district, or city tax agencies for whom you must collect sales taxes.

            As you select each one, they are added to the tax agencies list. If you select one by accident you don’t need, you can click the “Delete” button at the agency row’s right end to remove it. Repeat this process to select all the tax agencies for whom you need to collect sales taxes. When finished, then click the “Next” button to continue.

Set Up Sales Tax in QuickBooks Online - Instructions: A picture of a user setting up sales tax agencies in QuickBooks Online.

Set Up Sales Tax in QuickBooks Online – Tutorial: A picture of a single tax rate created in the “Sales Tax Center” in QuickBooks Online.

           QuickBooks Online then calculates the related tax rates and finishes the sales tax setup automatically. In the final screen, you can click the “Create invoice” button to create an invoice, if desired, to see the sales tax in action or you can click the “X” button in the upper-right corner of the window to close the “Set up sales tax” window.

            QuickBooks Online then prompts you to finish the set up by opening a “How often do you file sales tax?” window for each agency where you need to select the filing frequency you use for filing sales tax with that agency. Select your choice from the “Filing frequency” drop-down and then click the “Next” button, if needed, to move to the next agency and repeat the process. When finished, click the “Save” button to save your changes.

            When you are finished, the “Sales Tax” page then shows your current sales tax due. In the upper-right corner of the page are links for “History,” “Sales tax settings,” and a “Reports” drop-down. You can use the “From” and “To” calendar drop-downs at the left side of this page to select a date range and click the “Refresh” button, if needed, to see a list of sales tax returns, grouped by status, below that.

            For created returns, you can click the “View return” link to view instructions on completing the return and recording it in QuickBooks Online. At the right side of the page are different links in a “Shortcuts” section you can click to perform the related sales tax task, if needed.

Set Up Sales Tax in QuickBooks Online: Instructions

  1. To set up sales tax in QuickBooks Online, click the “Taxes” link in the Navigation Bar.
  2. Then click the “Sales Tax” tab in the page that opens to the right.
  3. Alternatively, hover over the “Taxes” link in the Navigation Bar and then roll over and click the “Sales Tax” link in the side menu that appears to also open the same page.
  4. Then click the “Set up sales tax” button that appears in the “Sales Tax” page the first time you open the “Sales Tax” page to open a “Set up sales tax” wizard in a new window.
  5. In step 1 of the “Set up sales tax” wizard, enter your company’s physical address into the “Business address” fields to determine your default sales tax agency or agencies.
  6. Then click the “Next” button to continue.
  7. In step 2 of the “Set up sales tax” wizard, it asks if you need to set up sales tax for regions outside of your company’s physical location address.
  8. Select either the “Yes” or “No” option, as needed.
  9. If you select “No,” then the associated tax agency or tax agencies appear below in the window.
  10. If you select “Yes,” then the initially selected tax agency or agencies appear at the bottom of the window along with a “Select an agency” drop-down.
  11. Use the “Select an agency” drop-down to select the tax agency for the different state, county, district, or city tax agencies for whom you must collect sales taxes.
  12. As you select each one, they are added to the tax agencies list.
  13. To remove a tax agency if you select one by accident you don’t need, click the “Delete” button at the agency row’s right end.
  14. Repeat steps #11 through #13 to select all the tax agencies for whom you need to collect sales taxes.
  15. When finished, then click the “Next” button to continue.
  16. QuickBooks Online then calculates the related tax rates and finishes the sales tax setup automatically.
  17. In the final screen, you can click the “Create invoice” button to create an invoice, if desired, to see the sales tax in action or you can click the “X” button in the upper-right corner of the window to close the “Set up sales tax” window.
  18. QuickBooks Online then prompts you to finish the set up by opening a “How often do you file sales tax?” window for each agency where you need to select the filing frequency you use for filing sales tax with that agency.
  19. Select your choice from the “Filing frequency” drop-down and then click the “Next” button, if needed, to move to the next agency and repeat the process.
  20. When finished, click the “Save” button to save your changes.

Set Up Sales Tax in QuickBooks Online: Video Lesson

          The following video lesson, titled “Enabling Sales Tax,” shows you how to set up sales tax in QuickBooks Online. This video lesson on how to set up sales tax in QuickBooks Online is from our complete QuickBooks Online tutorial, titled “Mastering QuickBooks Online Made Easy.”

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