What Happens If You Make the Default Tax Account Inactive?

Posted by on Jun 13, 2012 in QuickBooks Tips | 0 comments

I should point out that this article has to do with the Canadian users of QuickBooks, so it may not be relevant to anyone else, hey!

In working with a client the other day, I discovered that they had decided to add two accounts for their GST/HST Payable. One was for the HST paid and the other for the HST collected.

To do this they made the QuickBooks default GST/HST Payable Inactive as displayed by the X in the screen shot on the left. Now there is a reason that QuickBooks adds specific accounts to the program for the users, and this is so the information that builds reports and performs functions, knows which accounts to send the amounts and data to. If you go changing these, some of your reports and features become unusable.

For example, the function that is very useful for filing your HST is found on your Menu Bar, Sales Tax/File Sales Tax and directs you to the display shown above.

If you make your default Tax account Inactive, this feature will not work. Not only that, but your sales tax Codes and Items, which are preset to the specific general ledger account, will not work. Why? Because the link will have been broken between them.

So, if I might pass along some advice to those that may have done this, have a ProAdvisor take a look at this and help you fix it. Otherwise, your remittances may be over/under stated, and that could cost you in penalties and interest.

Hope this explains to you what happens if you make the Default Tax Account Inactive.

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