Join Josh Zweig for an in-depth discussion in this video Setting up sales tax, part of FreshBooks Essential Training.
- Most businesses will be dealing with sales tax in one form or another, so it's important to ensure you set up your sales tax settings before you begin invoicing. Note that the rules for sales tax will differ across tax jurisdictions, so it's a good idea to either speak to your accountant or do some research with your local tax authority to learn how you can charge sales tax to your customers. Click on taxes in the tab bar under settings. Here you'll see three columns, the name, the rate, and the number/ID. The name is the name of the specific sales tax that you'll be charging.
For example, you could enter VAT for the value added tax or GST for the government sales tax. The rate is the tax percentage that corresponds to the sales tax type. For example, if your rate is 5% for customers that are charged the VAT, enter that value in the text box. The number/ID is the tax number for that particular tax which will appear on your invoices in the sales tax calculation. You can generally get this information from your accountant or local sales tax authority.
Enter the name, percentage, and number that relate to each tax item. When you're finished, click on add another tax to set up additional tax items if you charge different rates to specific customers. To remove a tax item, click on the red X beside that line item. Note that you can always edit your sales tax settings if anything changes. Click on save to lock in your sales tax rates. You'll now be able to apply these rates on your estimates, invoices, and credit notes.
Visit FreshBooks.com to sign up for a free 30-day trial and use your new account to follow along with Josh.
- Signing up for FreshBooks
- Accepting credit cards
- Adding customers and contractors to FreshBooks
- Logging time to projects and tasks
- Creating estimates and invoices
- Tracking receivables
- Tracking expenses