Thank You for your answer. I was also wondering if creating a Bill for Sales Taxes due and then paying them from that invoice has any affect on the financials? Shouldn't this just be a simple journal entry? Thank You for clarification.

So let me reiterate what you are saying.  The client paid for the goods or services but did not pay the tax.  You sent a NEW invoice for the sales tax on the goods, not just the same one with the balance due. 

If you send a tax due invoice you would create the invoice using the Liability account number for sale tax payable.  No other entry would need to be made.  

If this is not what you are saying please use your snipping tool and send screen shots. 

No, I was actually asking a separate question.  When paying Sales and Use Taxes to the State shouldn't the entry for remitting these taxes be a journal entry? Instead of creating a bill for the Sales and Use Taxes due?

If you pay online, yes you can do a journal entry. 

If you mail a check, you would pull up a vendor check and debit the liability account where you collected the taxes. 

Yes payment is submitted online. So if a bill is created to pay the sales and use tax collected from customers is anything being under or overstated

by creating a bill for this? Doesn't that hit sales somehow if a bill is created? sorry I am having a hard time wrapping my head around this 

Ok so you have collected sales tax from clients.  That is a liability, not an expense! So the tax collected is just being sent to the tax department.  It is like you collected money for your friend,  now you are going to give it to them.   It has nothing to do with your income.   So it is sitting in a liability account  (usually starts with a 2xxx)  you write a check or pay online. You take the money you collected for them from your bank account and debit the tax collected account. 

If you used QuickBooks in the past,  I totally understand why you would be confused.  

Thank You Very Much! Isn't creating a bill just doing extra work? This could be just a simple Journal entry correct? and Yes I have mainly used QuickBooks in the past. 

Thanks Again!

Either is acceptable.   A journal entry works or you can just click "PAY BILL" and choose Vendor  XYZ Tax department.  For the check ID, write online and use the date you paid the Tax Department.   For the GL account below, choose the Liability account where you have put the collected taxes. 

QuickBooks does not know sales tax is a liability.   Very very sad software  program.   It so easy because you can put your data anywhere.   Your accountant can easily fix it at the end of the year.  Welcome to Sage.  

Shirley Byard,  President, bestbusinessstrategies.com 

Either is acceptable.   A journal entry works or you can just click "PAY BILL" and choose Vendor  XYZ Tax department.  For the check ID, write online and use the date you paid the Tax Department.   For the GL account below, choose the Liability account where you have put the collected taxes. 

QuickBooks does not know sales tax is a liability.   Very very sad software  program.   It so easy because you can put your data anywhere.   Your accountant can easily fix it at the end of the year.  Welcome to Sage.  

Shirley Byard,  President, bestbusinessstrategies.com