I run a cart and we don't deal with change so that we charge whole
doller amounts and then back out the tax.  I have been just guessing
and checking to get the correct amount.  For instance for a 5 doller
item we need to charge the MA tax of 5% so we set the actual item
price to be 4.76 so that it is about 5.00 in price.  I would love to
have an easy formula I could plug into a spredsheet for this.  I know
its possible to do, just don't remember enough math to figure it out. 
If anyone could help me out that would be great!  Oh and as many
decimal places as needed (within the restraint of Quickbooks) could be
used.

Hi Stevenc413,

Divide the final dollar amount by 1 plus the tax percentage. In your
example above, you have a tax rate of 5%, which is the same as .05.
You want to end up with a final result of $5.00. $5.00 / 1.05 = $4.76.

If your tax rate is 5.25%, you would divide by 1.0525. And so on.


Additional Info
----------------
Just as a side note, there is a nice little algebra formula I learned
in school for deriving all sorts of percentage calculations:

Is      %
--  *  ---
Of     100

In your case, you wanted the Of, so we replace Of with the variable x
...

5 is 105% of x

Insert the numbers into the formula ...

 5     105
--- *  ---
 x     100

Cross multiply to get ...

105x = 500

Divide both sides by 105 to solve for x ...

x = 4.76
--------------------------

Please let me know if you any additional information or clarification!

- Hammer

Exactly what i needed thanks a lot!  I knew that formula from school I
just couldn't remember.  Now the question is do I have to tell the
boss how I figured it out? :-)

Hi stevenc413:

Having filled out the Massachusettes Sales Tax return, I'm reading a
little deeper into your question, as I believe I know what you're
getting at.  I speculate you are trying to determine what your sales
are before taxes (so you can multiply your sales times 5% and pay your
sales tax).  Since you mentioned an Excel spreadsheet, here are the
formulas.

In cell A2:  Key in your Sales (the amount you collected including
tax)
In cell B2:  Enter the formula: =A2/1.05 (this will calculate your
sales)
In cell C2:  Enter the formula: =B2*0.05 (this will calculate your tax
to pay)

Then copy these formulas down columns B & C the number of times you
have sales entries (ie. if you have 500 sales entries, copy the
formula from B2 to B501)

I'm using 3 sales here as an example, but your spreadsheet (answers)
should look something like this:

Coll'd	Sales        	Tax
5.00	4.761904762	0.238095238
8.00	7.619047619	0.380952381
10.00	9.523809524	0.476190476
-----------------------------------
23.00	21.9047619	1.095238095  TOTALS

Hope this information helps.

Hi can you Please help me out. I have same problem only difference is
the tax rate which 8.75% in NY. Can you show steps for 8.75% Rate in
Excel.

================== Need steps for 8.75%=======================

In cell A2:  Key in your Sales (the amount you collected including
tax)
In cell B2:  Enter the formula: =A2/1.05 (this will calculate your
sales)
In cell C2:  Enter the formula: =B2*0.05 (this will calculate your tax
to pay)

I tired changing # in excel with this formula, didn't work out..

Thank you

Hi can you Please help me out. I have same problem only difference is
the tax rate which 8.75% in NY. Can you show steps for 8.75% Rate in
Excel.

================== Need steps for 8.75%=======================

In cell A2:  Key in your Sales (the amount you collected including
tax)
In cell B2:  Enter the formula: =A2/1.05 (this will calculate your
sales)
In cell C2:  Enter the formula: =B2*0.05 (this will calculate your tax
to pay)

I tired changing # in excel with this formula, didn't work out..

Thank you
 
====================

Well you are asking for free help here not sure if I'm breaking any
rules, but basically you just have to change the 1.05 to 1.085 in cell
B2.

Here is an example.  Say you sell an item for $2.00 which as far as
your concerned already included the tax.  In order to get this to work
in your books the actual sale price would have to be $2.00/1.085 or
$1.843.  To check this you can multiply 1.843 times your tax rate
1.085 and of course you should get $2.00.  Hope that helps!