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Many small businesses have to charge sales taxes for goods and services sold. When the tax settings are properly set up, TrulySmall Accounting will track the sales tax when you sell goods and services as well as track sales tax you have paid on expenses. It's important to note that the setup process differs for Canadian Users vs the USA/Rest of the World. To learn how to configure taxes correctly for your country, please read below:
The Taxes screen includes taxes which were pre-configured for your business based on your business location. TrulySmall Accounting monitors changes in taxes and rates, and updates the configured taxes as needed.
Click on + Add tax configuration link to change the date range for which you are registered to recover taxes, or add a missing "Registration Number".
If you charge this tax on Income, make sure the "Registered" slider is set to active. The Sales Tax will now be available for you to use when entering your income and expenses.
USA & Rest of the World
The Taxes screen allows you to configure your own sales taxes manually. You can also update the configured taxes as needed on the same page.
To begin, click on + Add New Tax to create your own sales tax and rate.
Next, enter a Tax Name and Rate. If you currently collect this tax from your clients you can enable the toggle as shown below on box #1. Enter all relevant information in this section including your Registration Number.
If you are eligible to deduct taxes you have paid from the taxes you have collected, enable the toggle to make the tax recoverable as shown below on box #2.
Lastly, click on the Save button. You will see a summary of your sales tax on the Taxes screen. You can edit or delete the tax at any time.
Now you can start applying the sales tax on your income and expense transactions (depending on your configuration). Here's an expense example below.