QBO Tax Setup and Compliance

Question 1

Where do you configure automated sales tax in QuickBooks Online?

Accepted Answer

Taxes menu > Sales Tax

Answer

Accountant menu > Tax Center

Answer

Account and Settings > Tax Preferences

Answer

Reports menu > Tax Reports

Question 2

What two pieces of information does QBO's automated sales tax engine use to calculate tax on a transaction?

Accepted Answer

Customer's shipping address and the taxability of the product or service

Answer

Customer's email and industry

Answer

Company's ZIP code only

Answer

Vendor's address and item weight

Question 3

What does marking a product or service as 'taxable' tell QBO to do?

Accepted Answer

Apply the applicable sales tax rate when that item is sold to taxable customers

Answer

Apply the highest available tax rate automatically

Answer

Exempt the item from all taxes

Answer

Create a separate tax line in all reports

Question 4

Which QBO feature provides a filing workflow to calculate and prepare sales tax returns?

Accepted Answer

Sales Tax Center filing workflow

Answer

Automated Payroll Filing

Answer

Tax Form Library

Answer

Intuit e-file desktop tool

Question 5

How do you mark a customer as sales tax-exempt in QBO?

Accepted Answer

Set their tax status to Exempt in their customer profile

Answer

Delete their shipping address

Answer

Apply a 0% rate manually to every invoice

Answer

Use a journal entry to reverse tax charges each month

Question 6

In QBO's sales tax setup, what does a 'tax agency' represent?

Accepted Answer

The government entity to which collected sales tax is remitted

Answer

A third-party accounting firm

Answer

A payroll tax processing service

Answer

A report that calculates federal income tax