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cash on QB and sales tax numbers vs 1099's do not match!


WITAXLADY

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QB sales and 1099'as do not match and sales tax numbers to state do not

1099's are $60,000 more!

Last year , had to add $100,000  to get to match,, this year short..

I was thinking just accrual sales reporting vs cash Until the 1099's were too high

So I told business owner to go thru invoices and see if 1099's matched?

Any other options? Where to look?

Thx

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There are a few things you can do and you already are doing one of them by matching invoices to 1099s.

Be sure that there are no duplicate 1099's.  Checking bank statement deposits - all accounts - might turn up something.  Business owners often make business deposits to personal accounts.

Good luck!

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1.  Client could be undereportinf sales tax.

2.  If business is a restuarant, tips are being reported on 1099K, more then likely its not reflect on sales tax.

3.  I seen this one before 1099k were issued, client was allowing friend to use the credit card machine to process sales, this stopped when 1099k started.

4.  QB was not setup properly, seen this before.

5.  Do a cash analysis.

6.  I would also look at purchases and inventory and use the markup % to arrive a sales, you’ll be shock to see people continue to make purchases when their sales doesn’t make sense.

 

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I vote for lying client. Had one last year that we do the write up work for. Every month cash was was running at an increasing deficit because way more money was going into the bank than was being reported as sales. By the time he came clean, we had to amend sales tax reports to the tune of nearly $50,000. 

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1 - he is wholesale manufacturer

2 - I am naive, but I do not think he ever lies... very nice guy, he is also somewhat naive

3 - will match further - I think it is 1099 error and 16, vs 17 error

4 - he does his own books and it may easily be a combination of 1099 and QB error

5 - good idea on bank statements as well - , do have qb file

 

Thank you, D

 

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