Hi debmitchell75-ya,
Thanks for posting in the Community!
When recording an expense, choosing between inclusive or exclusive tax depends on how you’re managing your financial records and what your accounting practices are.
Inclusive of tax refers to the amount of tax paid as proportion of the after-tax value. On the other hand, Exclusive of tax refers to the amount of tax paid as a proportion of the pretax value of whatever is taxed.
You may check your invoice or receipt if the price listed includes tax or if tax is calculated separately. If you need to report tax separately, exclusive tax might be more appropriate.
You may also want to consult an accountant to confirm the correct tax to choose on your transactions so your reporting would be accurate.
For your reference, you can also check this article: How to I set up a default tax rate for transactions (Inclusive/Exclusive of GST)?
Feel free to post again if you have any other questions. Have a nice day!
