METHOD & GUIDANCE
How this calculation works
Keep tax-inclusive and tax-exclusive figures consistent, and use the rules and rate that apply to the relevant jurisdiction and transaction. Tool IQ recalculates every output immediately; nothing you enter is saved or sent to us.
How to use the result
Reconcile tax collected by filing jurisdiction and period, subtract amounts already remitted, then keep the remaining reserve separate from operating cash. Confirm filing dates and obligations with each relevant authority.
Worked example
The opening example has $12,000 collected, $3,500 already remitted and $5,000 reserved. That leaves a $3,500 reserve gap before adjustments.
Common mistakes
- Treating collected sales tax as revenue.
- Combining jurisdictions or filing periods that have different due dates.
- Assuming marketplace-collected tax is always part of the seller's remittance obligation.
Frequently asked questions
Is the sales tax reserve planner free?
Yes. It requires no account and stores no calculation inputs.
Can I use the answer for a formal filing?
No. It is a planning estimate, not accounting, tax, legal or investment advice. Confirm material decisions with a qualified professional.
Does this calculator choose the correct sales tax rate for me?
No. Enter the combined state and local rate that applies to the transaction. Taxability and sourcing can vary by product, customer and jurisdiction.
Continue the decision
- Sales Tax Calculator — Add or remove sales tax with a clear breakdown.
- Cash Flow Forecast Calculator — Project closing cash from collections, payments and one-off movements.
- Reverse Sales Tax Calculator — Separate a tax-inclusive total into subtotal and sales tax.
Popular small-business decision paths
- Calculate sales tax on a transaction
- Separate tax from an inclusive total
- Review the US sales-tax decision guide
Method reviewed 29 July 2026. Figures are illustrative and calculated locally in your browser.