Best practices on handling taxes when syncing with QuickBooks Online

When syncing WooCommerce orders to QuickBooks Online, MyWorks Sync is able to handle a variety of different tax scenarios - dependent on both the tax rates charged in WooCommerce, and how these tax rates are set up in QuickBooks Online.

While MyWorks Sync would not be able to sync tax rates from one platform to the other (they must be set up manually, as desired in both WooCommerce and in QuickBooks Online) - tax rates can be mapped together in MyWorks Sync > Map > Tax Rates once present in each platform. 

The way in which tax rates would be mapped together would depend on the country you're present in, and this doc helps provide a guide of the recommended way in which we usually see tax rates handled in our sync - based on the country you do business in. 

While these best practices will generally apply, it's best to first ensure your tax rates are correctly set up in both WooCommerce and QuickBooks with your accountant - and our support team is always available to assist with ensuring they're correctly mapped together in our sync.

United States

Setting up tax rates when selling in the United States can generally be broken into two scenarios - depending on if Automated Sales Tax (a recent feature in QuickBooks Online US) is enabled in QuickBooks, or if it is not. The best way to confirm this is by visiting the Taxes tab in QuickBooks Online. If it shows a total of tax collected in the top left - Automated Sales tax is enabled in QuickBooks.

Automated Sales Tax is enabled in QuickBooks

When Automated Sales Tax is enabled in QuickBooks Online, there is minimal setup necessary in our sync, as we support handling syncing tax all behind the scenes. Since QuickBooks Online calculates sales tax rates automatically, there's no need to set up individual rates in QuickBooks, and thus, no need to map them together in our sync. 

What's needed:

  • The Tax Rate tab in MyWorks Sync > Map will not be visible, as no tax rate mapping is needed.
  • In WooCommerce, tax rates may be set up however desired (either using manual rates, or an automated sales tax calculation tool)

Under these circumstances, our sync will sync WooCommerce orders that are taxed with the correct amount into QuickBooks Online - where QuickBooks Online will then correctly categorize the tax amount charged. No other setup is necessary.

Automated Sales Tax is not enabled in QuickBooks

When Automated Sales Tax is not enabled in QuickBooks Online, your tax rates simply need to be added in the Taxes tab in QuickBooks Online - if not added already. Once added here, and in your WooCommerce store, they can be mapped together in MyWorks Sync.

What's needed:

  • In MyWorks Sync > Map > Tax Rates, your WooCommerce tax rates should be mapped to the corresponding QuickBooks tax rates.
  • In MyWorks Sync > Settings > Tax, a "Non-Taxable" rate should be set, which is only used for items in orders that are not taxed. This would normally be named "Out of State" or "No Tax" - but would depend on how this tax rate was named in your QuickBooks.

Note: When Automated Sales Tax is not enabled in QuickBooks, and, you are using an automated sales tax calculation plugin in WooCommerce, the only way to handle syncing orders with our sync is to enable syncing sales tax as a line item in MyWorks Sync > Settings > Tax - since rates that are automatically generated in WooCommerce couldn't be mapped to static rates in QuickBooks. We have a great doc on handling Automated Sales Tax here.

Canada

Tax Rates in Canada are generally uniform, and almost always consist of 13-17 static rates that are charged across different provinces - usually GST, HST, PST - and sometimes a combination of GST and PST. 

In WooCommerce, these rates should be manually set up in WooCommerce > Settings > Tax. No automated sales tax calculation service should be needed in WooCommerce, as these rates do not vary once set up.

In QuickBooks, these rates can be added in the Taxes tab, if not already present. When using QuickBooks Canada, QuickBooks will walk you through adding these taxes based on the provinces you sell in. Your accountant should assist with this if you're uncertain adding these here.

What's needed:

  • In MyWorks Sync > Map > Tax Rates, your WooCommerce tax rates should be mapped to the corresponding QuickBooks tax rates.
  • In MyWorks Sync > Settings > Tax, a "Non-Taxable" rate should be set, which is only used for items in orders that are not taxed. This would normally be named "Out of Scope" or "Exempt".
  • Combined tax rates (for example GST + PST) can be mapped together in the Compound Tax Rates tab in MyWorks Sync > Map > Tax Rates. This supports mapping two WooCommerce rates that would be applied in the same order - to a single combined QuickBooks tax rate.

United Kingdom

Tax Rates in the United Kingdom - and any other areas charging a single VAT rate are generally very straightforward, as only the VAT rate charged (usually 5% or 20%) would need to be present in WooCommerce and QuickBooks, then simply mapped together in MyWorks Sync. 

In WooCommerce, these rates should be manually set up in WooCommerce > Settings > Tax. No automated sales tax calculation service should be needed in WooCommerce, as these rates do not vary once set up.

In QuickBooks, these rates can be added in the Taxes tab, if not already present. The locale of QuickBooks you use may already automatically set up the necessary VAT rate(s).

What's needed:

  • In MyWorks Sync > Map > Tax Rates, your WooCommerce tax rates should be mapped to the corresponding QuickBooks tax rates.
  • If a 0% tax rate is present in WooCommerce or in QuickBooks, this can be mapped the same way in MyWorks Sync > Map > Tax Rates
  • In MyWorks Sync > Settings > Tax, a "Non-Taxable" rate should be set, which is only used for items in orders that are not taxed. This would normally be named "Out of Scope", "NO VAT" or "Exempt".

Australia

Tax Rates in Australia - and any other areas charging a single VAT rate are generally very straightforward, as only the VAT rate charged (usually 5% or 20%) would need to be present in WooCommerce and QuickBooks, then simply mapped together in MyWorks Sync. 

In WooCommerce, these rates should be manually set up in WooCommerce > Settings > Tax. No automated sales tax calculation service should be needed in WooCommerce, as these rates do not vary once set up.

In QuickBooks, these rates can be added in the Taxes tab, if not already present. The locale of QuickBooks you use may already automatically set up the necessary VAT rate(s).

What's needed:

  • In MyWorks Sync > Map > Tax Rates, your WooCommerce tax rates should be mapped to the corresponding QuickBooks tax rates.
  • If a 0% tax rate is present in WooCommerce or in QuickBooks, this can be mapped the same way in MyWorks Sync > Map > Tax Rates
  • In MyWorks Sync > Settings > Tax, a "Non-Taxable" rate should be set, which is only used for items in orders that are not taxed. This would normally be named "Out of Scope", "NO VAT" or "Exempt".
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