Adding sales taxes
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Adding sales taxes
Adding a transaction to your Wave account typically comprises of three steps: categorizing the transaction, including a sales tax if appropriate, and marking the transaction as reviewed. We’ve made...
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So, since HST% differs in each province, do I need to add an HST Sales Tax % entry for each province so it calculates the correct amount for each transaction?
Hey @Leesa, you're correct! Because Wave operates in so many countries and territories, our sales tax system doesn't come with preset taxes uploaded. So, I'd recommend generating a Sales Tax for each province you plan to sell in, and name it HST - Ontario, HST - Alberta, etc, to make applying it a little easier. You could either generate an HST per province right away, or create those taxes as each new province or territory comes up.
Greetings @Samd, while I totally understand your recommendation below, I am having issues applying it. In MN the sales tax is based on the city where the goods will end up, ie our customers mailing address. When I go to set up the MANY sales taxes that I will require, it appears that the abbreviation field is limited to only ten characters and must be unique. The name field is allowed a great deal more characters, but doesn't seem to be used anywhere in Wave. When I create a new invoice, the sales tax drop down only shows the abbreviation and not the full name. The invoice itself also only shows the abbreviation. While I can be "creative" in trying to abbreviate our city names, it ls rather hard to remember when trying to select the proper one when creating an invoice or putting in a receipt.and more importantly looks totally unprofessional and confusing to the customer on the invoice they get. In fact should you want to use the word "Sales Tax", which is common here, I only have one remaining character. I would love the option to display the name field on the invoices instead of the abbreviations and I would find it very useful to be able to have the sales tax drop down be able to search on the full name as well. Any advice for me???
@kitwood Having to create many sales taxes is definitely not something we want our customers to experience. Although the restrictions around tax input is a platform limitations, it's possible we can reveal additional info in the workflow to provide better visibility.
Would you be able to provide additional info around your business (service/product) and how your customers purchase from you? This doesn't sound like an issue our users commonly run into but I'd like to gather more data to potentially identify other workarounds. In the meantime, using a combination of tax/city/province abbreviations is the best solution available.
Thanks for reaching out!
I have a "kind of" related question. I sell from the eBay platform, so when a customer purchases an item, the invoice automatically generates the invoice (for instant payment), and I do not do each one individually. I live in Florida, which is a destination sales tax state, so I have to pay tax on the items that I send to a customer that has a mailing address in Florida. EBay is limited in that I can only set up a tax for the STATE, but Florida charges many different surtaxes per county. In the end, I just charge the state tax of 6%, and end up eating the surtax rates when it comes time to pay the taxes. I still calculate and pay them correctly, but I am not sure how to categorize that when I review and update the transaction. Here is an example:
Total sale for the item is 13.69
Ebay calculates the 6% rate and send the customer an invoice for 14.51, which includes a 6% sales tax of $0.82
In actuality, the sales tax for Sarasota county is 7%, which comes to $0.96, which should go to my sales tax account. I can edit the amount in the sales tax for each individual item, but it seems like that would make the bookkeeping off, because the transaction amount would then change to 13.55, which is incorrect.
I guess my question is....in editing the individual transaction, do I make it reflect the actual rate collected? Then when I send money to the state it will just be out of balance. This is considering that I must then have a liability account for the sales tax as it is collected, but not due to be paid until the quarterly due date. Does Wave automatically generate this liabilty account?
I would like to ask if it is possible to add a sales tax with the same name and abbreviation, the only thing that will change is the tax rate.
Hey @Eviana_09, to answer your questions in reverse order, Wave will automatically generate a liabilities account when you create a Sales Tax, and move funds into it so that you can track what is owed. Because the tax collected is variable, it may be worthwhile to set it as the base 6% and manually edit/override amounts in transactions themselves. It may also be possible to setup sales tax 'modifiers', by which I mean additional Sales taxes which could then be added to the base tax so that it reflects the variable rates. This would require a fair amount of manual adjustments, but may be worth it to prevent having to absorb the extra percentages.
@Air2019 at the moment the name could be the same, but the abbreviation would need to be different. This is just to keep things looking a little cleaner in reporting, as well as to help ensure the correct tax gets applied. If you're looking to have as similar as possible, you could always append the percentage rate to the abbreviations to make it clear, but still have taxes set with similar names.
The note at the bottom about the $500 total doesn't seem to apply to this article, which makes it confusing.
Hi @TAG12 . Thanks for pointing this out to us. I'll pass this along to the team so they know.
I notice in my old software I could add sales tax to the total, rather than to each item. This could make a difference of a cent or so depending on rounding.
As I've switched and trying to recreate my invoices, Wave doesn't offer the option to add tax on the invoice total, only adding it to each line item separately. So the new copies of the invoices are not the same, some are off by 1c.
Any way to deal with this? I notice I'm not able to add an exact amount for GST as a workaround, only able to have it automatically calculated...
Never mind, I just edited each line item to zero hours, noted the hours in the description for reference, and added all the hours into one line item. Same total sale, same GST, will never have to worry again since it's a one-time switchover.
I might have to ditch wave for my automated transactions because of how poorly it handles Canadian taxes. You absolutely must be able to setup taxes so that when a person indicates their province, that it will add the appropriate tax for them. I provide a service and am required to use the tax of the person's location, so if Alberta, then 5%, but if Ontario, 13%. There is absolutely no way that Wave is structured to be able to handle this in an automated way right now. And it's a shame, too, because that's easy coding!!!! (I code, and have done so myself.)
Hey @dan777! Thanks for reaching out. I do completely understand where you are coming from on this and how useful this feature would be for your business. Unfortunately, we're not there yet and introducing an automation like that is not on our immediate roadmap. Right now we are focusing our attention on an over haul of the reconciliation feature and updates to invoicing amongst lots of other exciting features.
I'm sorry I can't offer you a solution to this, I hope that adding the different taxes manually to your customers isn't too much of a work around and that you will stick with Wave!
I do understand you are very busy and will look forward to that when you are able. Thanks for your quick response!
Please bare with me as I learn this.....I am confused as to whether there is somewhere that calculates HST tax that I have paid out? I have set up my HST sales tax for 13%. So far my invoices have been to US customers ( I am a CDN biz) so zero rate tax is charged. The zero rate amount shows up in my Sales Tax report. I am not seeing any of the HST I have paid to my CDN vendors. I am just confused as to where I would find this? Or am I doing something wrong? Any advice/help would be greatly appreciated
Thank you so much!!
Hey @RobynMak! Thanks for reaching out! The reason you are not viewing any taxes on your reports could be due to the way they have been set up. When creating a sales tax you will have the option to check a box that will mark the tax as 'recoverable' or 'non-recoverable'. In the case of non-recoverable taxes, the tax amount will not be calculated on expense transactions. To read more about the differences between this you can click here. Once a tax has been created and marked as recoverable/non-recoverable it is not able to be changed. If you do find you need to change the tax, you can create a new one under: Settings > Sales Tax and then make bulk changes to apply the new tax to your transactions. Check out this Wave guide to see how you can bulk edit taxes on transactions. Hope that helps
Oh that is exactly what I did, I made it unrecoverable in error. Thank you so much I will create a new one! Thank you for getting back to me 😊
Hey @Tbegin! At present, it is not possible to delete or edit taxes within the mobile app. You can definitely still add taxes to particular products, but to delete them, you would need to navigate to your online profile in order to edit them there.
Hi,
I'm also new to Wave.
I live in South Africa.
I need to be able to create a recoverable VAT tax, which should not show as a liability in my balance sheet, but as an asset as it is money that the tax authority should pay back to me.
Even if I select the tick box for recoverable tax, it shows up under my liabilities.
Please help.
Regards
Marius
@MMostert64 Hey Marius! A liability denotes money owed which is why tax accounts always show up under Liabilities. Is it a jurisdictional regulation that you need to have this account show up under Asset? If it's not, it seems to me that liability would be the right place for the account.
Let me know!
Hi all. My supplier has rounded tax up, but when I enter it on Wave it rounds down so my tax is 1p out! Any way of amending that?
I appreciate the ability to bulk edit transactions as it speeds up allocations.
Well done Wave.
I'm not sure if I'm missing something but when categorising individual transactions, is there a way to have a default tax come up.
Otherwise I have to
Include tax
Use drop down box (as the drop down box doesn't respond to type input)
Update the tax
and then save the transaction.
Pretty long winded for a simple function.
Hey @covflyer , the only way to amend this would be to add a 1p line item to make it match up with the amount.
@1afc Unfortunately there's no way to have a default tax come up, as you do have to add it yourself to the transaction.
I'm having an issue adding tax inclusive numbers in US dollars to a CAD account. So...
I can create an invoice which allows me to input numbers in USD which is great but these numbers are tax inclusive but the invoice adds the tax. On the other hand, I can add the numbers as income and include the tax which IS inclusive BUT I can't add them as USD. Please help.
(I'm switching over from Xero and this is one of about 10 major issues I'm having.)
Hi @lisapineau! Thanks for reaching out. Sorry to hear you are running into some trouble. Are you able to provide some screenshot examples from your account that show what is happening? These will be useful if we need to escalate this issue further within our teams here!
I was able to fix my problem by switching the account to USD. Basically what would have been helpful is if there was the option to add tax inclusive numbers to an invoice (as you can with "add expense")
hiii ,
plz how can i create tax and subtracted it from total not add
Hey there @Moataz12_
Could you kindly provide us with a use-case example of what your transaction looks like in the real world? This will allow us to understand your case better and give you some more sound advice.
I have a different situation....In Manitoba, any items i purchase and use in the business, i have to charge myself PST. Example: I buy a Camera for my business but when i purchase it from a vendor, They only charge GST and NOT PST. So how do i show the PST on the expense? In quickbooks, i had an account that was used for "PST-Purchases" where i would add the amount of PST i needed, then when i remit my sales tax, it would add PST -Purchases and PST-Sales together and thats what i would send to the province. How do i go about doing that in Wave?