Calculating Sales Tax on Estimates

Summary

Estimates allow you to quote a price to a customer without finalizing a sale. This guide explains how to use TaxCloud to provide an accurate tax quote on an Estimate and explains why these transactions are treated as "lookups."

Calculating Sales Tax with TaxCloud Integration in QuickBooks Online.mp4 1444x1052

When to Use This

Use this process when you need to send a quote to a customer that includes sales tax, but the sale has not yet occurred.

Step-by-Step Instructions

1. Create an Estimate: Navigate to Sales or the + New menu and select Estimate.
2. Fill Out Estimate Details: Enter the customer, date, and product line items.
3. Calculate Tax: Click the Calculate Tax button from the TaxCloud integration.
4. Review: A sales tax line item will be added to the estimate, giving your customer a complete total.

Important Note on "Lookups"

• No Tax Liability Created: Transactions marked as "Estimates" are treated as Tax Lookups Only in TaxCloud. They do not record a sale or create a tax liability in your TaxCloud reports.
• Converting to a Sale: To finalize the tax and record the transaction, you must eventually convert the Estimate into an Invoice or Sales Receipt within QuickBooks Online. Once converted, the resulting invoice or receipt will be captured as an order.