Wave makes it easy to record the sales tax you pay on purchases and the tax you collect on sales. When it’s time to remit the sales tax you owe to the government or record a refund, you can do that by using the Sales Tax report.
The sales tax report tracks the amount of sales tax that you owe. You can report on either the accrual basis (which includes tax on unpaid invoices and bills) or cash basis (which includes tax only on paid transactions in your bank or credit card accounts), depending on what your tax jurisdiction requires.
Unsure whether you file your Sales Tax on an accrual or cash basis, or is it your first time filing? We recommend that you speak with your bookkeeper or accountant for guidance.
Choose the Reporting Period
Navigate to the Reports page in the left-hand navigation and choose the Sales Tax Report from the list.
Select the time period you want to report on. Then select either Accrual or Cash & Cash Equivalents from the dropdown menu, then select Update report.
Understanding Taxes You've Collected and Paid
The top half of the report, Sales & Purchases, shows the total amount of each sales tax you’ve set up in your account that was collected on sales and paid on purchases. This is the part of the report that you’ll use to file your sales tax return to the government.
The first column shows the name and percentage of each Sales Tax.
The second and third columns show the total sales you made that tax was applied to and the total amount of tax collected on those sales.
The fourth and fifth columns show the total purchases you made that tax was applied to and the total amount of tax you paid. The total tax paid column will only show a value if the sales tax is set up as a recoverable tax. Learn more.
The final column shows the net amount of tax due to or from your tax authority for the time period of the report.
It’s important to remember that the Tax amount on sales and the Tax amount on purchases that you see on the Sales & Purchases half of this report often won’t match the debits and credits totals in the account transactions report.
This report shows the net amount of sales and purchases and is intended to be a tool to help you easily complete your tax filing.
Understanding Tax Payments You've Made and Taxes You Still Owe
The bottom half of the report, Payments & Balances Owing, is a summary of the actual payments and refunds received for each sales tax for the selected time period.
The Starting balance column shows the amount due to or from the tax authority at the beginning of the time period of the report.
The Net tax owing column takes the amount from the last column of the Sales & Purchases half of the report, and is the net amount due to or from the tax authority for the period in the report.
The Less payments to the government column shows any payments you’ve made and any refunds you’ve received for each sales tax.
The final Ending Balance column totals the beginning balance, tax calculated on sales and purchases, and payments made or received, to report a total net amount due or receivable for each sales tax. The balance in this final column will match the ending balance of the tax account on the balance sheet.