Can Quicken record sales tax ONLY when the invoice is marked as paid ?

When I create an invoice Quicken automatically adds the sales tax to the "sales Tax" account, even if the invoice has not been paid.  When I look at the sales tax account for the amount to pay the sate sales tax, this is showing me a liability for some tax I have not collected (if the invoice has not been paid).  Is it possible to have Quicken record the invoice sales tax ONLY when the invoice is marked as paid or "receive payment"?


  • Quicken Sarah
    Quicken Sarah Alumni ✭✭✭✭
    edited December 2018
    Hello Juan,

    Welcome to the Quicken Community!  We appreciate you taking the time to share this question with us, although I apologize that you have not yet received a response.

    When taxable line items are added to the invoice, Quicken is designed to automatically calculate the sales tax amount and add that amount as a liability in the sales tax account because those taxes will eventually need to be paid to your state and the account is tracking the dates/amounts of taxable sales for reporting purposes.

    One workaround that may accomplish the sales tax recording only when the invoice is paid, would be to create the invoice and add the sales tax amount as an invoice Line Item instead of being auto-calculated by the invoice form.  Have the sales tax listed as a line item provides your Customer with the grand total of the invoice including taxes, but also prevents Quicken from automatically entering the tax amount in the sales tax account.

    Once the invoice has been marked as paid, the payment transaction would then need to be edited and recorded as a split category, transferring the sales tax amount to the Sales Tax account.

    I hope this information is helpful but please let us know if there are any further questions/concerns that the Community may assist with.

    Thank you,

  • mshiggins
    mshiggins SuperUser ✭✭✭✭✭
    edited December 2018
    From C. D. Bales:

    You might consider a couple of different approaches.

    Approach One:

    _ After you enter an invoice payment transaction, go to the *Sales Tax* account and modify the sales tax transaction for the just-paid invoice to have a Cleared Status of "c".

    _ When determining the amount of sales tax you owe, use a report on the *Sales Tax* account that excludes all but transactions with a Cleared Status of "c'.

    _ When the sales tax in a transaction in the *Sales Tax* account has been paid to the taxing authority, modify that sales tax transaction to have a Cleared Status of "R"

    [both of the above Cleared Status modifications can be done to multiple selected transactions at one time].

    Approach Two:

    _ Create a new liability account; call it "Sales Tax Payable" (for example)

    _ After you enter an invoice payment transaction, enter a second transaction to transfer the sales tax amount for that just-paid invoice from the "*Sales Tax*" account to the "Sales Tax Payable" account.

    _ Determine what you owe the taxing authority using unReconciled transactions in the Sales Tax Payable account.

    _ When the sales tax for a transaction in the Sales Tax Payable account has been paid, modify its Cleared Status to "R".

    Both approaches assume that when you pay the taxing authority, that payment transaction has a Category of the sales tax account you use to determine how much to pay in square brackets - example [*Sales Tax*].

    Quicken user since Q1999. Currently using QW2017.
    Questions? Check out the Quicken Windows FAQ list

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