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Senior Explorer **

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
Not applicable

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.

5 Comments
Not applicable

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.

Senior Explorer **

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.
Not applicable

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
Established Community Backer ***

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.
Senior Explorer **

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

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