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Year-End Sales Tax Review

Learn about how to review and confirm your sales tax amounts in your Year End Hub

Rayla Rappaport avatar
Written by Rayla Rappaport
Updated over 6 months ago

1. About

The Year End Hub includes a "Sales Tax" task under Other Items in your checklist. This task helps you review your sales tax liability balance in Finaloop and ensure everything matches your records and is accurate for your tax return.

This guide will walk you through how sales tax is calculated in Finaloop and how to verify your balance as part of the year-end process.

2. How Finaloop Calculates Sales Tax

Integrated sales channels

Finaloop automatically syncs sales tax data from these platforms:

  • Shopify

  • Amazon

  • Etsy

  • Walmart

  • eBay

  • PayPal invoices

  • Stripe invoices

Here’s how we calculate and reconcile your Sales Tax Liability on your Balance Sheet:

  1. We track the sales tax collected from your customers through the platforms listed above. This amount is added to your Sales Tax Liability balance.

  2. We also track any sales tax remitted directly to tax authorities by the sales channel (e.g., Amazon or other marketplaces). This amount is reduced from your Sales Tax Liability balance. The result is what we refer to as Net Sales Tax Collected.

  3. Whenever you categorize a bank or card transaction as a sales tax payment, the Sales Tax Liability balance decreases, so you always know the amount you still owe.

  4. So to sum it up, your Sales Tax Liability in Finaloop is your Net Sales Tax Collected minus any sales tax payments.

Non-integrated sales channels

For sales channels not integrated with Finaloop (e.g., BigCommerce or WooCommerce), you’ll need to:

  1. Check the Net Sales Tax Collected in your sales platform reports.

  2. Manually add this amount to Finaloop as part of the year-end process in Finaloop.

3. Verifying Your Year-End Sales Tax Balance

In the Year End Hub checklist, you’ll find two key questions to help you verify your sales tax balance:

  1. Did you collect sales tax in 2024 from sales channels NOT integrated with Finaloop?

  2. Does the Sales Tax Liability balance in Finaloop match your external records as of December 31, 2024?

Let’s take a deeper dive into each and walk you through how to get this done quickly!

Question 1: Did you collect sales tax in 2024 from sales channels NOT integrated with Finaloop?

  • If your answer is No:
    You’re all set for this step since all data from your integrated channels has been synced. However, we still ask that you review your balance in Question 2 to make sure no payments or data were missed.

  • If your answer is Yes:
    You’ll need to add the sales tax collected from the non-integrated channels. You can either:

    • Add the amount for each channel individually by selecting the channel from the dropdown list, or

    • Enter the total as one lump sum by selecting Multi-channel from the dropdown menu.

    • The total amount you enter will automatically update the sales tax liability balance shown in Question 2.

    • Note: if you want to add the amount for each channel individually, but don’t see the relevant channel on the dropdown list, contact support for assistance.

Question 2: Does the sales tax liability balance in Finaloop match your external records as of December 31, 2024?

The sales tax liability balance in Finaloop is calculated as follows (refer to section 2 above, “How Finaloop Calculates Sales Tax” for more details):

  • Starting balance on January 1, 2024

  • Plus: Net sales tax collected in 2024 from integrated channels

  • Minus: Bank or card payments categorized as sales tax payments to tax authorities

  • Plus: Any amounts entered in Question 1 for non-integrated channels

Click the Sales Tax Liability link in Question 2 in your Year End Hub to see details on the transactions impacting the balance.

To confirm your balance, compare this balance to your external sales tax records, such as:

  • Your internal tracking records,

  • Your CPA’s records (if they’re managing your sales tax), or

  • External sales tax filing software (e.g., TaxJar, Zamp, Numeral, Avalara) if you are using one.

If your external records show a different balance:

  • Click Report a different balance to submit the correct balance from your external records.

  • Our accounting team will review your input and make the necessary adjustments. (Please note: updates will not appear immediately in your balance.)

Need Help?

If you have any questions or need assistance, reach out to us at [email protected]. We’re here to help make the process as smooth as possible!

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