Is there a way to have sales tax automatically moved into a separate account for holding and filing?

[FlowerShop]

I would love to have a way for square to move my sales tax payments into a separate account so those dollars don’t get mixed with actual revenue. I’m currently doing this manually and it’s just a pain to do every week. 

is there a better solution?

[HC_Charlie · Accepted solution]

Hello @FlowerShop thanks for your post. Have you opened a Square Savings Account? This is a great way to help save for your sales tax future payments. Once you open a Square Savings Account, you can specify a specific percentage of your daily sales to automatically be placed into your savings account. For example, if your state sales tax rate is 3 percent, you can set aside and auto save that 3 percent. When it comes time to pay your sales tax, you can transfer the money from your Square Savings Account into another account where you can then pay your sales tax.

Find out more on opening a Square Savings Account here! I hope this helps with your question. Cheers and happy selling (and SAVING!) with Square!

[selenia]

Is there a charge from square to do this?

[Arie]

There are no minimums or monthly fees with Square Savings accounts, @selenia. Learn more here to get started. 

[fredandfred]

This is exactly what we do. Makes withholding tax funds easier. 

[TwinkleToes]

This is definitely a great way to go and I just started using the functionality. Just want to clarify how the savings works so that people reading the posts are not caught off guard. The following is from the Square Savings FAQ help: "Note: Automated savings are applied to gross card sales including tips and taxes paid by customers using a credit or debit card, ACH payments, and QR code payments made with Cash App."

So if you have a significant amount of sales paid for with cash and checks, there's good news and bad news. The good news is that because the amount transferred to the savings account is based on the gross sale, a percentage of the sales tax and/or tips for the credit card sale is also being saved. The bad news is that it might not be enough to cover all non-card sales. So if you set the savings percentage to the same as your sales tax rate, you may not have enough in that account to cover your tax filing.

For my situation, historic sales by payment type were reviewed and we decided to set the automated savings percentage to 1.5% above the sales tax rate.

Hope this also helps!