Understanding tax profiles

aACE gives you the ability to set up and use multiple tax rates in what are called "tax profiles".

When a category is selected in an order, the corresponding tax rate (based on order's tax profile) is used to calculate the tax amount, and that amount is then posted against the corresponding GL account once the order is invoiced.

Navigation

The Tax Profile module is located under accounting. From the main menu: Accounting > Tax Profiles.

Screen Overview

Each tax profile supports up to four taxing entities. In the example below, the profile has been set up to calculate the proper amount of sales tax for each entity: the state, the city and the county. The rates can be set up to calculate independently based on category type, and you can even set exceptions.

Tax_Profiles.png

Below is an explanation of each section of the screen.

Tax Profile Info
This is for the tax profile name, code, and start and end dates (optional).

Tax Setup
This is where the taxing entities are listed and assigned to General Ledger accounts. When an invoice is opened, the tax amount calculated for each entity is posted to the assigned GL Account.

Default Rates
These are the tax rates that will be used when calculating the tax amount. Each category type can have a different tax rate for each taxing entity. (Generally "Other" type categories are not taxed.)

Exceptions
This is where exceptions to the profile are listed. Individual categories can be set up with their own tax rates in the event they should not inherit the default rates by category type.

See Also

How to enter a tax profile

How to link a tax profile to a company record

How to override a tax profile at the order level

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