How to convert sales tax from accrual basis to cash basis on QuickBooks? To further explain the question--once converted to cash basis on preferences, how to separate cash collections on receivables for which sales tax has already been paid?
The conversion is under Edit > Preferences > Sales Tax.
But before you check the cash basis sales tax, you should get in touch with your state's department of revenue. The state might require to pay sales tax on an accrual basis even if you are reporting everything else on a cash basis.
Reka
Say report & pay sales tax on accrual basis at 12/31/09. Then convert from accrual to cash basis for transactions beginning 01/01/2010. Say you receive $100 cash in January 2010 for a December 2009 receivable. However, you have already paid sales tax for December on accrual basis. Now January is on cash basis. QuickBooks will calculate sales tax due for January the $100 cash received--which would double the sales tax. This is the crux of the question.
There is no easy way. You can print the open invoices report as of the end of 2009. Print the same report at the end of January and look at those invoices that are due for more than 30 days. The difference should give you the sales you already paid the sales tax on and that is added again to the January sales and sales tax. There is no automatic way to make QuickBooks figure out the double-reporting because of the switch from accrual to cash basis.
Reka
I figured out a way for QuickBooks to track this. Assume cutoff date 123109. Calculate sales tax accrual for 123109 (013110 will be on cash basis). Run an open Invoice as of 123109. Create a one-time use only nontaxable Sales Tax Code "TAP - Tax Already Paid." Create a new Item "TAP," linked to a one-time use only Sales Tax Liability account. Recode the Open Invoices. Assuming the "regular" Sales Tax iability account is balanced, this account should go to zero at 123109, and the one-time use only Liability account should equal the 123109 liability. When cash is collected on the Open Invoices in 2010, the cash basis revenue will be under the TAP sales tax code--and you have the already taxed collections segregated! Thanks for your interest in the question.
