Learn how sales tax works in QuickBooks Self-Employed.
When you're self-employed, you're responsible for collecting sales tax for the products and services you sell. Check your state and local governments' tax franchise boards to see what you need to collect and when to send it.
QuickBooks Self-Employed tracks income from the products and services you sell. However, it doesn't automatically calculate sales tax. This isn't a problem for most users. Your payment processing service usually includes sales tax when you make a sale. It also tracks how much sales tax you've collected throughout the year. This is the easiest way to track sales tax.
If you want to track sales tax in QuickBooks Self-Employed, you can manually add it. We'll show you how to create a sales tax item you can add to invoices like a product or service Note: You won't be able to track manually added sales tax on your financial reports.
See how much sales tax you collected
Refer to your payment processing service to see the total sales tax you've collected.
Payment services may add sales tax when you process payments. If you sell on an online platform like Etsy, you may be able to also see what you've collected on your seller profile.
If your payment processing service doesn't add sales tax to transactions, you'll need to do it manually.
Add sales tax to transactions in QuickBooks
Add sales tax to an invoice
Each time you need to collect sales tax, you need to add it manually. Create a specific sales tax line item you can add to invoices:
- Go to the Invoices menu.
- Select Create invoice.
- Select Add product or service.
- Select the Product or Service dropdown and then + Add new.
- Enter "Manual sales tax" for the name and enter your sales tax rate.
- Select Save.
Now you can add the "Manual sales tax" item any time you create an invoice. Here are a few things to keep in mind:
- Always review the Amount field. Make sure you calculate the sales tax amount for the purchase total.
- Always note in the Description field how much sales tax you added to the invoice. This will help you stay organized during tax season.
Add sales tax to downloaded transactions
Check your payment processing service. All the info should be there.
When QuickBooks Self-Employed downloads transactions from your bank, the sales tax gets combined with the sales total. The two rates aren't separated.
See sales tax totals in QuickBooks
Unfortunately, there's no report in QuickBooks Self-Employed that gives you totals for line items on your invoices.
You need to review each invoice you manually added sales tax to.