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Level 1

Should I set up a expense account for income tax paid ? We have a sole proprietor business

 
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QuickBooks Team

Should I set up a expense account for income tax paid ? We have a sole proprietor business

Hi there,

 

Thanks for reaching out. Being able to organize and manage your books accurately is important for the running of your business. I'll be happy to help.

 

QuickBooks Online automatically set up your chart of accounts based on the industry and type of company you choose when creating your company file. You also have the flexibility to add new accounts if needed, as shown in the article Add an account to your chart of accounts in QuickBooks Online

 

To know if you need to set up an expense account for your transaction, I'd recommend talking to your accountant. If you don't have an accountant, you can find one on our Find-a-ProAdvisor website

 

 You can also learn more on types of accounts in QuickBooks Online through this useful article: Understand the chart of accounts in QuickBooks

 

I hope this helps! Have a good one. 

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Level 6

Should I set up a expense account for income tax paid ? We have a sole proprietor business

Hi 3110:

 

On your profit and loss statement, your payroll journal should show as follows:

Wages = Net Salary paid to employee, provincial and federal taxes, employee portion of CPP, and EI

Taxes = Company portion of CPP

Company Contributions = Benefits paid to the employee

 

Eg, the only taxes account should be the company portion of CPP since technically the rest of the taxes are paid by the employee, but remitted by the company.