Incorrect Sales Tax Liability

Summary

Sales tax liability in "pay sales tax" screen is less than the liability on the G/L. The G/L is correct. I see I can increase the amount to be paid to cover the correct liability, but I do not see how I can fix them to make them agree afterwards. Any suggestions?

Question

Sales tax liability in "pay sales tax" screen is less than the liability on the G/L. The G/L is correct. I see I can increase the amount to be paid to cover the correct liability, but I do not see how I can fix them to make them agree afterwards. Any suggestions?

Answer

Check your sales tax preferences to see if it's set to "Owe Sales Tax - As of Invoice Date - or - Upon Receipt of Payment -" 1) Select the file menu, and then select Preferences 2) Scroll down and click on Sales Tax (3rd icon from the bottom) 3) Click the Company Preferences tab 4) Check the "Owe Sales Tax" field. If your state requires that you pay sales tax whether or not you've collected it from the customer, click "As of Invoice Date". 5) Change the setting if necessary and click OK. Another possibility is that sales were not entered using the forms (Cash Sale or Invoice). In that case, the sales tax items won't know about the accruals of tax. Check for deposits that were made directly to the checking account and possibly split between income and sales tax payable. That's a no-no. Replace any of those with Cash Sales.