This article describes the process for configuring taxes in QuickBooks Online (QBO) to work with Datto Autotask PSA.
- Datto Autotask PSA
- QuickBooks Online (QBO)
To edit tax rates in QuickBooks Online:
- Open QuickBooks and click Select Taxes from the panel on the left.
- Under Related Tasks, select Add/edit tax rates and agencies.
- Select the tax rate you want to edit, and then click Edit.
- From the index below, select a topic to continue:
- FOR US CUSTOMERS if automated sales tax is not enabled
- FOR US CUSTOMERS, if automated sales tax is enabled
- FOR NON-US CUSTOMERS
FOR US CUSTOMERS, if automated sales tax is not enabled
- If you have not enabled automated sales tax in QuickBooks, the name of the Tax Rate in QuickBooks needs to match the name of the Tax Region in Autotask.
- QuickBooks Online applies one aggregate tax rate to the entire invoice, instead of breaking out the taxes line by line as in Autotask.
- For example, you have a tax region in Autotask called State Tax, with tax categories of Tax 1 at 2% and Tax 2 at 3%, making the total tax for the region 5%. You have a combined tax rate in QuickBooks Online called State Tax, with components Tax 1 at 2% and Tax 2 at 3%, making the total tax rate also 5%.
- You create an invoice with two billing items at $100 each, with billing Item 1 with Tax 1 applied and billing Item 2 with Tax 2 applied. In Autotask, the tax would apply to each line item.
- Billing Item 1 is taxed $2, and billing Item 2 is taxed $3. In Autotask, the tax total would be $5.
- When the invoice transfers from Autotask, QuickBooks looks at the tax region for the Autotask account to know what tax rate to apply. It then uses the aggregate tax amount for the tax rate in QuickBooks.
- The invoice, once transferred to QuickBooks, would show a total tax of $10 as it is applying the 10% tax rate total to the invoice and not 2% and 3% to the respective individual items.
Item one = $100 - Tax cat 2% - Tax = $2 - Total for Item is $102
Item two = $100 - Tax cat 3% - Tax = $3 - Total for Item is $103
TOTAL FOR INVOICE = $205
QuickBooks Online Invoice
Item one = $100 - Line total $100
Item two = $100 - Line total $100
Subtotal = $200
Taxes %5 = $10
Total for invoice = $210
FOR US CUSTOMERS, if automated sales tax is enabled
- If Automated Sales Tax (AST) is enabled in QuickBooks, you do not have to use it. However, if you do prefer to use AST, you must select the desired address to be used for tax calculation in the Autotask Invoices App Settings. The chosen address setting is what the application uses to determine the tax locale, and in turn, perform the tax calculation automatically.
FOR NON-US CUSTOMERS
- QuickBooks applies a single tax rate to each invoice line.
- QuickBooks determines the tax rate by looking at the Autotask account's tax region. It then looks at the Autotask billing code of each of the line items on the invoice. The combination of the tax region from the account and the tax category from the billing code is how the tax is determined.
- Keep in mind that only one tax rate can match to a line in QuickBooks. Autotask allows more than one tax rate to apply to any given invoice line. For example, in Canada, some users may set up a GST tax rate and a separate Province tax rate. Only one of these tax rates can assign to a line in QuickBooks. To get around this single tax rate limitation, we recommend creating an aggregate tax rate in Autotask that represents GST plus applicable province tax, for each province.
- See the below graphic for more information.