Setting Up Tax Codes and Adding them to Customers or Vendors

Background
Different Tax Code Types
Adding New Tax Codes
Editing a Tax Code
Deleting a Tax Code
Assigning a Tax Code to a Customer or Vendor
Set Default Tax Code for New Customer Cards
Set Default Tax Code for New Vendor Cards

Background

You can use AccountEdge to manage your Sales Tax and get proper reporting on what you need to remit to the government. AccountEdge comes with some standard taxes; however, you can add new tax codes and adjust tax rates as needed.

Different Tax Code Types

  • Sales Tax: This tax type is associated with the tax recorded on sales and purchases of goods and services.
  • Import Duty: This tax type should be used by importers bringing goods into the United States from other countries. Tax codes with this type are used to record the import duty payable on a purchase without changing the total amount of the purchase.
  • Consolidated: This tax type is used for taxes that are made up of two or more tax codes or sub-taxes. You would use this code if, for example, the 8% tax rate you record on sales is the combined total of a 5% state sales tax rate and a 3% city sales tax rate. You need to set up the individual tax codes before you can add them to the consolidated code

Adding New Tax Codes

Each tax code represents a particular type of tax, which is used to calculate tax on your transactions. Your software has an extensive list of tax codes that can be used in a variety of situations — for example, when doing business with overseas customers, when tracking capital acquisitions and so on.

To create a Sales tax code or Import tax code:

  1. Go to Lists from the menu bar at the top of the screen and choose Tax Codes
  2. Click New. The Tax Code Information window appears
  3. In the Tax Code field, type a code (up to 5 characters) for the new tax and press TAB.
  4. Enter a description, type, and rate
  5. If the Tax Type is Sales Tax, select the linked account for tax collected. If the Tax Type is Import Duty, select the linked account for accrued duty. Select a card that you want to link to this tax code, if applicable
  6. Click OK when you have finished. The new tax code you created will now appear in your tax codes list

To create a Consolidated tax code:

NOTE: Before you can create a Consolidated tax you need to create the Sales taxes or Import taxes that will be included in it:

  1. Go to Lists from the menu bar at the top of the screen and choose Tax Codes
  2. Click New. The Tax Code Information window appears
  3. In the Tax Code field, type a code (up to 5 characters) for the new tax and press TAB.
  4. Enter a description of the tax
  5. Click into the first line of Code section and hit TAB to view the list of taxes
  6. Select the first tax you want to include and click "Use Tax Code"
  7. Click into the next line of the Code section and continue as needed
  8. Click OK when finished

Editing a Tax Code

If a tax rate changes or if you wish to link a tax code to a different account, you can change the tax code information:

  1. Go to Lists from the menu bar at the top of the screen and choose Tax Codes
  2. Open the tax code you want to edit in the Tax Code Information window
  3. Make the required changes and click OK
  4. Please note that these changes will only effect NEW transactions - any transactions already recorded won't be altered unless they are re-recorded

How to Delete a Tax Code

NOTE: A tax code can only be deleted if it's not in use on a sale, purchase, or check transaction.

  1. Go to Lists from the menu bar at the top of the screen and choose Tax Codes
  2. Open the tax code you want to delete in the Tax Code Information window
  3. Go to the Edit menu and choose Delete Tax Code

Assigning a Tax Code to a Customer or Vendor

You can select a sales tax in the selling details of a customer card or the buying details of a vendor card for faster data entry.

  1. Go to Lists from the menu bar at the top of the screen and choose Cards
  2. Click on the arrow infront of the customer or vendor name. The Card Information window appears
  3. Click the Selling Details tab on a customer card or the Buying Details tab on a vendor card
  4. Enter the Tax ID Number, Tax Code and Tax on Freight information
  5. Click OK to close the window

When an invoice is created for a customer or a purchase is created for the vendor the tax information entered in the card will automatically be assigned when the customer or vendor is entered.

Set Default Tax Code for New Customer Cards

You can change the default tax code that is chosen for each newly created customer card file. This will change the default tax code for new customer cards going forward and will not change cards that have already been created.

  1. Go to your top menu bar and select Setup > Easy Setup Assistant > Sales.
  2. Click Next until you get to the Sales Tax window.
  3. Here you can change the default Tax Code that will be assigned to newly created customer card files.

Set Default Tax Code for New Vendor Cards

You can change the default tax that is chosen for each newly created customer card file. This will change the default tax code for new vendor cards going forward and will not change cards that have already been created.

  1. Go to your top menu bar and select Setup > Easy Setup Assistant > Purchases.
  2. Click Next until you get to the Sales Tax window.
  3. Here you can change the default Tax Code that will be assigned to newly created vendor card files.