Federal tax payments. What account do these go under?

timd1971 · ‎December 10, 2018

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?

RAY-M · ‎December 10, 2018

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

RAY-M · ‎December 10, 2018

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.

timd1971 · ‎December 10, 2018

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.

contact2 · ‎December 10, 2018

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

qbteachmt · ‎December 10, 2018

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.

Erss · ‎April 19, 2019

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

njshrink · ‎December 27, 2019

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]

NamiraHealth · ‎October 23, 2022

Quick books online - payroll version

Where dose the Taxes paid be categorizated in Quick books. I am not able to catergorize it under the the equity, I have an S corp and there is not option to create a new category.

Help with screen shots would be appreciated if possible.

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Federal tax payments. What account do these go under?