How to handle sales tax

1. Setting your rate

1. 1Open Settings and type your rate in the Default sales tax rate box, plus your tax area name if you want it shown on invoices (for example "Florida — Marion County").
2. 2Save. Every new invoice and every Point of Sale ticket now starts with that rate already filled in.
3. 3Typing a different rate at Point of Sale saves it as the new default automatically.
4. 4Mark any product that is exempt on the Products & Inventory page so it is never taxed.

2. Day to day

1. 1Tax is added automatically on every sale and invoice.
2. 2The Sales Tax page shows how much you have collected and not yet paid over.
3. 3Remember: collected tax is not your money. Keep it aside.
4. 4Every line on every sale starts out taxable. Tax only comes off when you tick the exempt box for that customer or sale, or untick Taxable on a single line.

3. When a sale counts for tax

Some businesses owe the tax the day they write the invoice; others not until the customer pays.

1. 1At the top of the Sales Tax page pick "When the money is received" or "When the invoice is written."
2. 2Every figure on the page — collected, payable, by quarter, by month and by area — follows your choice.
3. 3Your state decides which one you must use. Most want the tax reported when you write the invoice; some let smaller sellers report it only once they are paid, sometimes only with permission.
4. 4Check with your state before switching, and keep it the same all year so your returns match.

4. Building the return figures

1. 1Open Sales Tax and pick your dates on the calendar, or use the year and quarter shortcuts.
2. 2You get the four numbers a state return asks for: taxable sales, tax exempt sales, gross sales and tax collected.
3. 3Print it, download the PDF, email it to yourself or your accountant, or save it to your reports folder for the record.
4. 4Use those totals to fill in your state's online return, then record the payment so your books and your bank agree.