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Sales Tax Account

unknown

I would like to replace the Quicken Home and Business generated *Sales Tax* account with a savings goal account I have been accidentally using for years. There doesn't seem to be a way to do this.

I've tried to copy and paste transactions out of the savings goal account but this doesn't work either.

Any ideas would be most appreciated.

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Comments

UKR

At the bottom of the New Customer Invoice data entry form is a field with the Tax Account information. Click the pulldown triangle next to *Sales Tax*. Click <New> in the popup menu. Enter the name of an existing account, enter the required tax rate.
From now on this will be the account used to record the amount of sales tax collected with every new invoice. (Verify the correct account is used when you write your next new invoice)

I don't think you should (or need to) use savings goals for the purpose of withholding Sales tax.
Just write a check every month or quarter as required in the amount of the *Sales Tax* balance from your checking account and categorize it as a transfer from [*Sales Tax*]

In some versions of Quicken the *Sales Tax* account is/was created as a hidden account.
Use Tools / Manage Hidden Accounts to remove the "Hide ..." flags from the account so it appears on the Account Bar.

Tom Young

I have to ask: why in the world do you want to use a "savings goal" Account to deal with sales taxes?

Presumably you collect sales taxes and need to eventually pay those sales taxes to your state. When you collect the sales tax from your customer, let's say $50.00, the accounting entry is:

Debit (increase) "Business checking account" $50.00 (This is an asset on your balance sheet)
Credit (increase) "Sales taxes payable" $50.00 (This is a liability on your balance sheet)

That's a genuine business liability, an amount you're going to have to pay to the state at some point, and you don't want to misstate that amount on your balance sheet.

The whole idea of "Savings Goals" is, essentially, to put a fence around some amount of money sitting in a checking account or savings account, with a sign on it that says

"Don't spend this cash! It's being accumulated for [Name of Savings Goal]!!!!

Setting up a savings goal and moving money into it out of your checking or savings Account in Quicken has the effect of reducing the amount of cash that you see in the Quicken checking or savings Account register, meaning that you'll always think that you have less cash in the account with the financial institution than you actually have and therefore, presumably, won't spend it. Then when it comes time to pay the state you simply reverse the accumulation out of the Savings Goal and back into the checking or savings Account, and write your check.

The nice thing about Savings Goals, along with helping you not spend money that's "committed" to something, (e.g., paying the state their sales tax), is that Quicken really "knows" that money REALLY IS in the checking or savings Account and silently puts that money back into the Account for reconciliation purposes.

So I would say do your accounting in the correct fashion, having sales taxes collected but unpaid always showing up in the "Sales Taxes Payable to State" liability account. If you want extra help in ensuring you have the cash to pay the state when the sales taxes become due, use a Savings Account Goal to move money out of the checking account in the same amount as the sales taxes collected, each day or each week.