Quickbook has the ability to generate an exact report as the Sales Tax form required to file your sales tax. In this example I will use the Ontario sales tax GST.
According to your company address when you set up your company, Quickbook detemines what tax accounts to set up, what sales taxes are applied to your province / states, and the tax rates. It sets up the appropriate accounts for you automatically. You can also set up new tax codes if you and assign your own tax rates for you business.
If you have not set up Sales Tax when you create your company.
- Go to Edit menu, choose Preferences.
- You should see a list of icons on the left, scroll until you see GST/PST and click on it.
- Click on Company Preferences tab, and fill in the form accordingly
To create sales taxes, or modified tax codes and tax rates
- Go to List menu, choose Tax Codes List.
- Double click on the tax code if you want to modify the tax rate, or click on Tax Code button, and click New to add new tax code.
When you create new customer:job, expense account, or item, you will be able to assign the tax code of your choose. Once you have done that, all the invoices, bills payments you enter into the system, GST and PST will be calculated automatically for you.
However, for the old records, you will need to go back to each one of them and re-enter all the values with the tax code applied. The reason is that, Quickbook perform calculation and put your sales tax to the GST or PST payable liability account only during the time you enter your data.
Having said that, of course it is possible to separate GST / PST from expenses after the fact. Go to this article, Separate GST from Expenses in Quickbook, for a step-by-step walk-thru on how you can separate GST / PST from expenses.