The Pay Tax screen is accessible from the Vendors menu and is used to pay sales and/or payroll taxes. This screen lists the sales tax entries that were created from invoices or payroll tax entries created from processing payroll checks. This screen is an optional way of paying these taxes. If you are just starting to use the Pay Tax screen for paying your taxes you may have prior items you will need to remove. This procedure will help you to remove them.
Go to Vendors → Pay Tax. The example below is for sales tax. Select Vendors from the menu and click Pay Tax.
Select the vendor that you pay the sales tax to. This vendor should also be setup in the sales tax code found in Sales → Enter Tax Codes.
Select Sales Tax in the Type field.
In the Pay Tax Through field, enter the date that you want to remove all tax items through.
The Pay Tax screen will appear with all the tax entries prior to the date selected. By default all of them will have the Pay field checked.
In the Account field select the same account as listed in the tax entries.
The selected items are removed from the Pay Tax screen. The financial result is both debit and credit to the same account, thus creating a wash and no financial effect.
The Pay Tax feature can now be used from the through date going forward.
The same process can be done for payroll taxes with the following differences. Select the appropriate vendor for the type of payroll tax selected. If needed you can confirm the vendor via Employees → Payroll Tax Items and modify the tax in question to view the vendor.
In the Pay Tax screen if you have different accounts listed they will need to be cleared one account at a time. Check the Pay field for all items for a specific account. Select the same account in the top Account drop-down field.
Repeat for the next account until all needed items are removed.