How do you post HST on an insurance claim that we did not have to pay outright?

Diane18 · ‎March 11, 2019

An employee had a car accident in a company vehicle. Our deductible was $1000 and the insurance company covered the rest of the damage. But we had to pay the HST on the insurance company's share. The total HST we paid to the collision centre was more than our deductible. My question is how do I enter that in QB? Do I set it up as a Credit Card purchase for the whole amount (deductible $1000 plus all the HST we had to pay $1360.46)? Then put the $1000 in the truck maintenance account and change the Total Taxes to $1360.46? Or do I post directly to the HST payable account?

chipoffblock · ‎March 11, 2019

Were both the deductible and the tax paid in one payment? Or seperate?

Either way, you enter the deductible as one line in the payment,
and for the HST you enter a line as if you actually paid for the total, and select the HST tax code.
That should enter the correct tax in the Total taxes. Then you enter another line, with the insurance share as a negative, WITHOUT the tax code, and that will leave the balance only the tax amount, (or the amount of the tax and deductible if paid together)

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chipoffblock · ‎March 11, 2019

Were both the deductible and the tax paid in one payment? Or seperate?

Either way, you enter the deductible as one line in the payment,
and for the HST you enter a line as if you actually paid for the total, and select the HST tax code.
That should enter the correct tax in the Total taxes. Then you enter another line, with the insurance share as a negative, WITHOUT the tax code, and that will leave the balance only the tax amount, (or the amount of the tax and deductible if paid together)

Diane18 · ‎March 11, 2019

The deductible and the tax was paid in one payment on the employee's credit card. I entered as you stated. I entered the line items to the truck expense account. I hope that was correct. Thanks for your help.

epicure_lady · ‎March 11, 2019

where to you post hst payment only, in vendor bill payment or as a credit card payment or journal entry?

chipoffblock · ‎March 11, 2019

@epicure_lady

where to you post hst payment only, in vendor bill payment or as a credit card payment or journal entry?

You post it the same way you paid it in real life. If by cheque, then use Write Cheques. If by CC, then as Credit Card Charges.

Not by journal entry.

Mileage 2020 · ‎October 14, 2020

Hi,

I have a monthly insurance payment ($108)which includes PST(8%) on it. As I understand, from an accounting perspective it will be recorded as an expense for that month in P&L and for HST input tax I can't claim because it only has PST on it no GST.Should I be recording 100+8% =108 total in QBO no taxes(from bank just put it in insurance account and put tax out of scope?)? or it should be only 100 under expense and 8 under tax(In this case ,I have to create PST tax code than)?Little confused .what is the best way of doing it for Ontario Canada commercial insurance recording in QBO? Please share your knowlege.

LauraAB · ‎October 14, 2020

Hi there, Mileage 2020,

Welcome to this thread. I see you've visited many of our QuickBooks Community forums, so it looks like you might be working with a wide variety of business books. That's awesome! I want to make sure you have the information you need for recording this kind of transaction in QuickBooks Online Canada.

Knowing how this kind of transaction should be recorded is a great question to pose to an accountant. If you're not one yourself or don't have one, QuickBooks Online can even help you connect with one. I'll go over that closer to the end of my response to wrap things up.

First, I'd like to make sure that you have the details for how QuickBooks Online handles sales tax. If a transaction has sales tax as part of the charge, selecting the appropriate sales tax code will ensure things are calculating properly in the program. The program makes setting up sales tax codes easy through the Taxes tab, and after the initial setup, you can add other codes as needed. Here are a couple of articles that can help.

That being said, it's not likely that you'd want to select Out of scope for your sales tax code if the amount factors in the sales tax calculation, otherwise it won't calculate properly to the sales tax module. An accountant will be able to clarify that for you, or someone on this thread may have more information as well.

Back to the My Accountant tab in QuickBooks Online, clicking that takes you to an area where you can invite someone via email to your account or you can use the Find a pro to help button to connect with a QuickBooks-certified professional. Keep in mind, this option is available for non-accountant users of QuickBooks Online. If you have a QuickBooks Online Accountant account, you won't see this option.

I hope that helps with this process. Keep an eye out in case other users offer their advice on this tread. :)

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How do you post HST on an insurance claim that we did not have to pay outright?