In QuickBooks, you can record the tax refund of several types. These types can be inclusive of sales tax, payroll tax, corporate tax, etc. Usually, the Suppliers option in the accounting software helps you in recording the tax refunds. However, depending on certain situations and versions of QuickBooks, you may have to create a deposit, credit memo, or sales receipt to record or enter the refunds.
This blog explains such methods. You can read these methods to understand how to record a tax refund in QuickBooks as well as QuickBooks Online. These methods will also be apt for recording different types of tax refunds in these software programs.
You can easily navigate to the methods included here via this summary:
- How to Record a Tax Refund in QuickBooks?
- How to Record a Sales Tax Refund in QuickBooks?
- Option 1: Adding Your Sales Tax Refund in QuickBooks
- Option 2: Recording a Sales Tax Refund in QuickBooks Online from a Tax Agency
- How to Record Payroll Tax Refunds in QuickBooks in the Form of Checks?
How to Record a Tax Refund in QuickBooks?
Tax refunds can be added to the QuickBooks software by creating a deposit. The Make Deposit option helps you in completing the purpose. When you are using QuickBooks Online, you should use the Bank Deposit feature to manage the refunds received from tax submission. In both the software, the details need to be saved for properly recording your tax refund.
Below, you can find detailed methods that show how to record your tax refund in QuickBooks and QuickBooks Online.
Option 1: Recording a Tax Refund in QB
Your tax refund can be entered or recorded in QuickBooks via Suppliers. This is a menu that can be found in the main menu of the accounting software. Head to Tax Activities Group and choose Manage Tax. Now, go to Receive Tax Refund and then enter the screen for Make Deposits. Using this screen, you can provide the needed information along with the refund amount. After this, you can save the information.
For additional information relating to how to record tax refunds in QuickBooks, these steps should be thoroughly read:
- Use the menu of “QuickBooks” to visit “Suppliers”.
- Click on “Tax Activities Group”.
- Opt for “Manage Tax”.
- Tap on “Receive Tax Refund”.
- In “Make Deposit”, you will see certain fields. Input the required information in them.
- Mention the refund amount.
- Verify the details to ensure that they are correct.
- Finally, tap on “Save and Close”.
Option 2: Entering Tax Refunds in QuickBooks Online
In order to record a tax refund in QBO, you should take the advantage of its +New button. Press it to reach Other. Using this, opt for Bank Deposit. You will have to mention the information needed for the deposit as well as your account. After this, you can save your information. In a very short duration, your tax refund will be recorded in QBO.
- Run “QBO”.
- Look for the “+New” option and use it.
- Go to “Other”.
- Click on “Bank Deposit”.
- Provide the information relating to your account.
- Mention the details associated with the deposit.
- When you see the “Save and Close” button, press it.
Remember: This method is effective for learning how to record a tax refund in QuickBooks Online. However, it requires you to provide the correct details of the account in which the refund has been received. Along with this, the details of the tax deposits that you are entering must be correct.
How to Record a Sales Tax Refund in QuickBooks?
You can prefer creating a credit memo in QuickBooks for maintaining a record of your sales tax refund. However, if you receive a refund from any tax agency, then you will have to form a sales receipt for recording it. Especially when you are using QuickBooks Online, the sales receipt will have to be created for saving the tax refund.
Let us now go through these methods on how to record a sales tax refund in QuickBooks and QBO in a step-by-step manner.
Option 1: Adding Your Sales Tax Refund in QuickBooks
After getting the refund for the sales tax submitted, you can enter it in QB using the Customers menu. Then you can add a memo for credit or refunds. To go ahead, you need to write the details of the sales tax refund one by one. Next to this, the present date has to be put in. After writing it, you can save the details. Thus, the tax refund will get recorded in the accounting software.
Here, we have shown more details on how to record a sales tax refund in QuickBooks:
- Launch the menu of “Customers” in QB.
- Select “Create Credit Memos”/“Refunds”.
Tip: To get the details associated with creating a credit memo in QuickBooks, consider reading our post.
- Write the details of the sales tax refund.
Remember: In the credit memo, the items of your original voice need to be matched with the quantity and amount of the sales tax.
- Mention the existing date.
- “Save & Close” has to be pressed in the end.
Option 2: Recording a Sales Tax Refund in QuickBooks Online from a Tax Agency
You may be unable to record a sales tax refund in QuickBooks Online using any direct option or approach. However, you can make a sales receipt in this version of the software. In this sales receipt, you can add the details of the refund received from the sales tax.
To make a sales receipt for recording sales tax refunds in QBO, please use the Customer option. Then opt for the Deposit to Bank Account option. Following this, you need to list the items for which the sales tax refund has been obtained. Now, these items/services need to be mentioned as taxable as well as non-taxable to record the refund for the same.
- To make a “Sales Receipt” in “QBO”, click on “Customer”.
Tip: We have created a complete post to improve your knowledge of QuickBooks and sales receipts. Click here to go through it.
- Choose “Deposit to Bank Account”.
- After this pick the items or services relating to the sales.
Remember: In the third step, you will have to choose the items or services as taxable as well as non-taxable.
- Add the amount of refund for the taxable items.
- See to it that the amount of refund has been correctly written.
- After including the refund amount for all the taxable amounts, save the information.
This is how to record a sales tax refund in QuickBooks Online. You should remember that, presently, the most suitable option to record these refunds is by creating a sales receipt. As you receive more sales tax refunds in the future, you can create more sales receipts. Thus, all the refunds will get recorded in the accounting software.
How to Record Payroll Tax Refunds in QuickBooks in the Form of Checks?
On receiving the payroll tax refund, you can record it in QB. For this purpose, you can select the Employee menu. Head to Payroll Taxes and Liabilities Group and opt for Deposit Refund Liabilities. Following this, your vendor’s name needs to be specified. After specifying it, you can provide the date relating to the deposit and refund. Eventually, you will have to make a selection for the method to manage your deposit in the accounting software. On making this selection, your payroll tax refund will be added to the software.
Let us now see how to record a payroll tax refund in QuickBooks using a step-by-step approach.
- Open the “Employee” menu in “QuickBooks”.
- Select “Payroll Taxes and Liabilities Group”.
- Choose “Deposit Refund Liabilities”.
- Pick the name of your vendor.
Remember: You need to mention that vendor’s name who has sent you the payroll tax refund in the form of a check.
- Provide the deposit date in “Refund Date”.
- View “For Period Beginning”.
- Enter the day for the period of pay.
- Decide how the deposit has to be managed by QuickBooks. You can choose one of these options:
- “Categorize it Under the Funds that are Undeposited”
- “Deposit to”
Remember: The option of “Categorize it Under the Funds that are Undeposited” can be selected when you want to add the refund amount to your savings account. The second option “Deposit to” is helpful for tracking this amount for a chosen account.
- Navigate to “Taxes and Liabilities”.
- The payroll items need to be selected.
Remember: Only those items relating to payroll should be selected which have become affected due to the payroll tax refund.
- In “Amount”, view the positive amount added by you.
- Press “Ok”.
- In case you are using the “Assisted Payroll (US only)” version, select “Employees”.
- Opt for “Send Payroll Data”.
- Wait till you see the window of “Send or Receive Data”.
- Check your tax reconciliations as well as funds.
Remember: The reconciliations and funds should be the ones that have been deleted from the final amount of “Deposit Refund of Taxes and Liabilities”.
Your payroll tax refund will be recorded in QuickBooks on completion of these steps in the listed sequence.
How to Record a Corporate Tax Refund in QuickBooks Online?
In QuickBooks Online, you can record your corporate tax refund when you receive it. You can run this software and utilize its +New option. Then tap on Other. After this, click on Bank Deposit. Using this option, you can enter every detail that is required for recording the corporate tax refund. Ensure that all the values you enter in this method are right. Then you can hit the Save and Close option to record the corporate tax refund in QBO.
- Running “QuickBooks Online” is this method’s initial step.
- Now, tap on “+New”.
- Locate “Other” and select it.
- Click on “Bank Deposit”.
Tip: Should you like to know more about making bank deposits in QuickBooks, you can click here.
- Provide the information relating to your account.
- Now, mention the details associated with the corporate tax refund.
Remember: In this step, you will have to correctly mention the corporate tax refund that you have received. Along with this, the amount of the refund will have to be correctly added.
- For storing the details, hit “Save and Close”.
These 7 steps elaborate on how to record a corporate tax refund in QuickBooks Online. It should be known that these steps are specific to only this version.
In QuickBooks, a tax refund can be recorded using the software’s several options. As explained here, you can record different types of tax refunds. Sales tax refund, corporate tax refund, etc., are some of these types. Hopefully, our methods would have guided you in recording or entering such types of refunds in both QB and QBO.