GST
Hi there, @AndySSL.
I'll show you how QuickBooks calculates sales taxes and how we can make changes to it to use the exact rates in the application.
If you notice, there are instances where QuickBooks calculates temporary penny differences. These are usually due to rounding for taxes calculated at exact rates.
The system automatically creates a set of GST/VAT codes based on the information we receive from your state agency. There are ways we can modify this to achieve the desired amount. The first suggestion I have is to create custom tax rates. This option provides us with the capability to manually add the rates as a percentage based on our calculations.
Let me share this example for reference: Your desired GST amount is $9.47 and the invoice amount is $115.13. To get the percentage value we need for your tax rate, we'll need to get that from the amounts mentioned. We'll need to multiply the quotient of $9.47 over $115.13 to 100. Hence, the function will look like this, ($9.47/$115.13) x 100 = 8.22548423521%. It's also best to work with your accountant for other ways to calculate tax rates.
To add a tax rate, you can follow these steps:
- Go to the Taxes menu and select Add Tax.
- Choose which type of tax rate you want to set up.
- Enter a Tax name and Description.
- Put a checkmark on Sales since we will be using this rate for your sales transactions.
- In the Sales rate field, enter the manually calculated amount.
- Click Save to finish.
The other option is to manually change the rates upon creating your invoice. I added a screenshot for your reference:
Furthermore, check out this article once your client decides to pay the transaction. Doing so will keep your records accurate and balanced: Record invoice payments in QuickBooks Online.
Additionally, learn to manage your GST payments to ensure you adhere to legal requirements and avoid penalties and fines.
I'll be around the corner if you require additional help managing your tax rates, @AndySSL. I'm just a few clicks away. Stay safe!
