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Set Up Sales Tax in QuickBooks Online – Tutorial

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Set Up Sales Tax in QuickBooks Online - Tutorial: A picture of a single tax rate created in the

Set Up Sales Tax in QuickBooks Online: Overview

            To set up sales tax in QuickBooks Online for your company, click the “Taxes” link in the Navigation Bar and select “Sales Tax.” The first time you visit the “Sales Tax” page, you will be greeted with a welcome message and a list of things you can do. To get started, click the “Set Up Sales Tax Rates” button. There are four options available on this page. The first two options are “Mark all new customers taxable” and “Mark all new products and services taxable.” These two options can be changed later, either by default, or on an individual basis.

            The next section deals with “Sales Tax Rates and Agencies.” This section allows you to enter the sales tax rate for your location. The first option is a “Single tax rate.” This is the option you will choose if the area you do business in has a single tax rate for the whole state. The second option is “Combined tax rate.” This option is to be used when you have to claim city, state or county sales taxes separately.

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

            “Tax name” allows you to enter a name to display on your sales forms- for example “Michigan Sales Tax.” The “Agency Name” is the governmental department to whom you pay your sales tax, in this example “Michigan Department of Treasury.”

            The final option, “Rate,” is where you will enter the numerical sales tax rate. If you have more than one sales tax rate in your location, click “Add Another Rate” to continue the process. When you are finished entering your information, click “Save” to save and close the page.

            After clicking “Save,” you will be taken to the “Sales Tax Center” page. This page gives you an overview of the sales tax owed and any recent sales tax payments you have made.

Set Up Sales Tax in QuickBooks Online: Instructions

  1. To set up sales tax in QuickBooks Online and open the “Sales Tax” page, click the “Taxes” link in the Navigation Bar and select “Sales Tax.”
  2. To set up your sales tax rates, click the “Set Up Sales Tax Rates” button.
  3. To set all new customers as taxable, choose the “Mark all new customers taxable” option.
  4. To set all new products and services as taxable, choose the “Mark all new products and services taxable” option.
  5. To create a single tax rate, select the “Single tax rate” radio button.
  6. Enter the name for the tax in the “Tax name” field.
  7. Enter the name of the tax agency to whom you will be paying your sales tax into the “Agency name” field.
  8. Enter the sales tax rate into the “Rate” field.
  9. To create a combined tax rate, select the “Combined tax rate” radio button.
  10. In the “Tax name” field, enter the name for the tax- for example “MI Sales Tax.”
  11. The “Component name” fields are where you will enter the name of the different tax components- for example “State sales tax” and “City sales tax.”
  12. The “Agency name” fields are where you will enter the names of the agencies to whom you pay your sales tax.
  13. The “Rate” fields are where you will enter the sales tax rates for each component.
  14. Click the “Add Another Component” button to add as many components as you need.
  15. To add another sales tax rate, click the “Add Another Rate” button and repeat the process.
  16. To save your sales tax rates, click the “Save” button.

Set Up Sales Tax in QuickBooks Online: Video Lesson

            The following video lesson, titled “Enabling Sales Tax and Sales Tax Settings,” shows you how to set up sales tax in QuickBooks Online for your company. This video lesson on how to set up sales tax in QuickBooks Online is from our complete QuickBooks Online training, titled “Mastering QuickBooks Online Made Easy v.2015.”

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