How to Pay Sales Tax in Quicken Home & Business

On July 21, 2010, in Technology, Work, by Mike Waldron

Unfortunately there is no easy way to simply pay your sales tax in Quicken Home & Business like there is in Quickbooks.  In this post I will quickly outline the easiest way to calculate and pay your sales tax in Quicken Home & Business 2010.

In my example we will be paying Q2 2010.  Quicken automatically set up a sales tax tracking account where it automatically drops the sales tax from invoices I create.  I lump all my taxable sales into a category called “Sales” which you can see below.  This sales # is my taxable sales which I will need to calculate and reconcile with the tracking account.

Run a Profit and Loss Statement for the Tax Period you are paying by selecting “Business Reports” and “Profit and Loss Statement”

Change the report to Quarterly for the quarter you are paying tax on:

Here’s the report it generates:

In the case above there is $19,470 in non-taxable labor and $335 in taxable sales.  In Los Angeles there is an 8.25% state tax and a 1.5% district tax for a total tax of 9.75%.  This is what I have Quicken’s tax rate set to.  Doing the math with the above ($335 x 9.75%) I get $32.66 due to the California State Board of Equalization (our sales tax bureau in CA).  The California SBOE doesn’t like pennies so we just use whole numbers.  In my case $32.00 was payable for this quarter.

Now, Take a look at your Tax Collection account and make sure the numbers are equal, or at least close:

In my example you see that I owe $32.72 to the SBOE as calculated by Quicken ($32.66 was calculated based on the P&L).  The few pennies we are off here was due to my NOT adjusting the sales tax tracking account balance after paying my last return, which we will correct in the next step. To pay you sales tax, go to your checking account, and process your payment, selecting your “Sales Tax” account as the category (which treats it like a transfer):

In the transaction view for my “Sales Tax” account I simply add a blank debit transaction of $0.72 to zero out the balance and remove the pennies from the tracking account that I was not required to pay ($0.66), as well as the $0.06 that was there from NOT zeroing out the account last time I paid: $0.66 + $0.06 = $0.72.

Congratulations, you’ve paid your SALES TAX and are ready for the next quarter!

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