Troubleshooting: Tax Calculation Errors (Inclusive/Exclusive Mismatches)

Problem

The calculated tax_amount on a transaction line, or the summed tax total on the document header, is incorrect compared to the original document or expected values.

Common Causes

1. Incorrect "Tax Included" Toggle: This is the most frequent cause. The header-level Are the line totals inclusive of tax? toggle (tax_included field) does not accurately reflect whether the line total values on the source document include or exclude tax. Zudello uses this toggle to determine how to calculate the tax amount for each line. See Understand Line Totals & Taxes.
2. Incorrect Tax Rate: The wrong tax_rate (e.g., 0% instead of 10%) is selected for one or more transaction lines or landed cost lines.
3. Incorrect Line Total: The total value entered or extracted for a line item is incorrect, leading to an incorrect tax calculation based on that total.
4. Rounding Discrepancies: Minor differences ($0.01) can occur due to rounding during line-level tax calculations versus calculating tax on the overall subtotal.
5. Landed Cost Tax: Tax on landed cost lines (freight, handling) might be missed or calculated incorrectly if the wrong tax rate is applied to those specific lines.
6. Manual Override: A user may have manually overridden the calculated tax_amount on a line or the tax field on the header (if permissions and form configuration allow).

Troubleshooting Steps

1. Verify "Tax Included" Toggle:
   • Examine the source document. Do the individual line item totals include tax, or are they exclusive of tax?
   • In Zudello, ensure the Are the line totals inclusive of tax? toggle matches the source document's format.
   • If incorrect, change the toggle setting and Save the document. This forces recalculation of all line tax_amount values and the header tax total.
2. Check Line Tax Rates:
   • Review each transaction line and landed cost line.
   • Verify that the correct tax_rate is selected for each line based on the item or service type and jurisdictional rules. Correct any errors.
3. Check Line Totals:
   • Ensure the total field for each line accurately reflects the value from the source document. Correct any extraction errors or typos.
4. Save Document: After correcting the tax toggle, tax rates, or line totals, click Save or Update to trigger recalculation of tax amounts.
5. Use Validation Extensions: Enable the Validate document tax extension in your Document Type settings. This rule compares the calculated header tax total against the extracted header tax amount (if available) and flags discrepancies, often accounting for minor rounding. See Review Validation Issues.
6. Check for Manual Overrides: If tax fields are editable, check if values were manually entered. Clear overrides and save to allow recalculation.
7. Accept Minor Rounding: If the difference is only $0.01 after checking all other factors, it's likely a rounding difference.

Need Help?

If tax amounts are consistently incorrect despite following these steps, contact Zudello support. Provide:

• The Document UUID.
• Details of the incorrect tax amount and the expected value.
• Screenshots highlighting the relevant lines, tax rates, totals, and the "Tax Included" toggle setting.