I'm not an accountant or a bookkeeper by any definition. I'm running a small corp as a lending business and I do this to keep the liability separate from my personal finances.
I use quickbooks and I've learned a lot about accounting over the last year. One thing I can't seem to figure out is how to book in the taxes I just paid. I've read a lot, but im confused with all the different ideas.
1. I never paid installments and didnt have any related accounts for 2018.
2. I used Turbotax Corporate version and completed my return online with 'gifi' data pulled out of quickbooks.
3. I paid my taxes (as per the return) via my online banking.
4. For now, I have created a "Corporate Tax" expense to match the payment to something.
I'm wondering if/how it will affect retained earnings. Can I leave it as is and the expense will offset the extra retained earnings when I file next year's return?
Do I have to backtrack and record it in quickbooks in a more complicated way?
I appreciate your help.
The current issue is that I am my accountant, lol, for now.
I figured with some natural intelligence and a bit of logic I could save myself some money until the revenues/profits grow and I can afford an accountant.
Without it being official advice, do you think I'm 'safe' if I book it in as a 2019 expense (since that is how I matched up the transaction at this point)? Or am I way off?
Yes - go ahead and book it in 2019
I suggest you create 2 accounts for 'income tax expense' called 'this year' and 'last year' - that will help everyone understand whats happening.
I'm assuming that 'this year' will be if I happen to make installments and 'last year' is obviously the payment I already made... correct?
'last year tax' meaning > expenses i'm booking this year to settle income taxes due or estimated on last years earnings.
Thanks for all your help.
I'll definitely check in with an accountant before next year's return is due to be filed.