Does Quickbooks do the following...

Discussion in 'Apps & Software' started by flyingSquirrel, Jan 14, 2015.

  1. flyingSquirrel

    flyingSquirrel
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    I'm totally new to business, and am researching everything now so I can know what I am getting into and what my responsibilities would be (so far it's very overwhelming). Anyway, I am dazed and confused after several hours of researching state taxes (WA state). There is a WA state "Business Tax Basics" PDF file...which is SIXTY PAGES! BASIC, hah!

    Question is: Does Quickbooks "handle" *ALL* state taxes? There are A LOT of very complicated state taxes for WA and I don't understand how the heck anyone could legitimately track and compute everything correctly, unless there is some magical software that would do it for you. Taxes including but not limited to: Business and occupation tax, retail sales tax, Use taxes (also, the [absurd] personal property tax, which I doubt can be done in QB since the state has to assess and compute everything for you). The retail sales tax and use taxes are particularly confusing since they vary according to the states that things are sold or purchased in.

    Anyway, this is all very confusing, and I am beginning to doubt my ability to handle everything. Very discouraging, given how fired up I have been about starting a business. Thanks for any assistance
     
  2. astockwell

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    Hi flyingSquirrel,

    QuickBooks is really good about automating sales tax (once you've set it up) and to a lesser extent use tax, but not necessarily great at handling business occupation tax or personal property tax. The reason for this is that the B&O tax and especially personal property tax are a bit trickier to track. Bear with me as I get a bit technical.

    Fore sales/use tax, you can set up what quickbooks refers to as "sales tax items" and "sales tax codes."

    The "sales tax item" is the tax for a specific jurisdiction (example: WA state sales tax), and these items can be grouped.

    So, for example, in Phoenix, AZ, we collect a total of 8.3% sales tax. It's 5.6% for the state of AZ + 0.7% for Maricopa County + 2% for the city of Phoenix.

    Each of these is set up as a "sales tax item" and then grouped into a "sales tax group" which, in this case, you might call "PHX Combined Sales Tax"

    Then, you use sales tax codes to identify whether sales are taxable or non-taxable, and you choose which sales tax group or item to apply to it. QuickBooks will automatically calculate it, add it to the invoice/sales receipt, and then track it. You can then view a report of how much sales tax has been collected for AZ, Maricopa County, and Phoenix.

    Similar methods can be used for purchases that you make that will require you to later pay Use Tax.

    B&O tax would probably be best left to your CPA to compute, and I'm not familiar with Washington's personal property tax rules, so I can't comment much on that, but I assume this would also be something to talk to your CPA about.

    Hope this helps.

    AJ Stockwell
     
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  3. flyingSquirrel

    flyingSquirrel
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    Thanks for your helpful reply. I am sorry that I did not reply sooner (I didn't get an email notification from the forum, so assumed nobody replied)
     

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