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Level 2

Federal tax payments. What account do these go under?

You know, those HUGE chunks of cash that go to the IRS every year due by April 15 (yes, and/or quarterly payments).

Does this go under EXPENSES type, is this correct? i.e.:

TAXES

   Federal

   State

   Local

or

create under "OTHER EXPENSES" type this way?  would this data be handled differently then?

I guess I am confused those huge tax payments are actual EXPENSES or not?  Not sure if that would be interfering with the current years tax liability?

Solved
Best answer 12-10-2018

Accepted Solutions
Level 2

Federal Income taxes are not an expense but cost of doing...

Federal Income taxes are not an expense but cost of doing business.  Depends on your tax type of business as to were the entry will go too.  If, Sch C will end up as Owners Drawings, Corp's etc. into Equity.  Review this with your CPA for proper entries into QB.

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6 Comments
Level 2

Federal Income taxes are not an expense but cost of doing...

Federal Income taxes are not an expense but cost of doing business.  Depends on your tax type of business as to were the entry will go too.  If, Sch C will end up as Owners Drawings, Corp's etc. into Equity.  Review this with your CPA for proper entries into QB.

View solution in original post

Level 2

Ok...kinda figured that...but didn't queztion this until...

Ok...kinda figured that...but didn't queztion this until now.  My QB ProAdvisor set this up as example above (as expenses) and have wondered about it.
Level 1

Sorry, so as a sole prop/SchC when i write check in quick...

Sorry, so as a sole prop/SchC when i write check in quickbooks pro2014 and it asks what acount, I set to "Owners Draw" ?  Hey thanks
Level 15

As a Sole Proprietorship, you are taking Business funds t...

As a Sole Proprietorship, you are taking Business funds to make a Personal Payment. No matter what that will be used for, it is Just a Draw from Equity.
Level 3

Re: Federal Income taxes are not an expense but cost of doing...

Thanks, was about to post this exact question!  Thank you!

Level 1

Re: Federal Income taxes are not an expense but cost of doing...

Greetings and Happy New Year from NJ!

 

From following the thread, quarterly taxes paid to the IRS and State should be recorded as Member's Draw correct? I am the sole member of an LLC in NJ.

 

I am not sure how this all works so I will include my email address.

 

John V.

Owner

OmaDesala Psychiatric Services, LLC

Roosevelt, NJ.

[email address removed]

 

 

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