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kristinasan-biz
Level 1

Are Federal Refunds, Federal/State Tax Payments Categorized as Personal or Business Expense?

I'm talking about how to categorize them under Transactions. When I paid my estimated taxes, I categorized them as Business. I paid the remaining Federal and State Taxes using a bank draft and the transactions were recorded on Quickbooks. I also got my refund. Which of the two (Personal/Business) should I use?
Solved
Best answer February 05, 2020

Best Answers
Jen_D
Moderator

Are Federal Refunds, Federal/State Tax Payments Categorized as Personal or Business Expense?

Hello there, @kristinasan-biz,

 

Tax payments, both for Federal and State are usually tagged as Business as they are company expenses. However, when recording refunds, you can tag them as Personal then exclude the refunded payment in your QuickBooks Self-Employed account.

 

Doing this will remove the payment from the transactions indicating that it has been refunded. Here's how to exclude them:

 

  1. Go to the Transactions tab and locate the Federal payment.
  2. Click to expand the transaction then mark the Exclude option at the bottom.
  3. Hit Save.

Next, if you connected your bank and downloaded the refund transaction, manually change the category as Personal.

Refer to these resources to learn more about recording taxes in QBSE:

 

Self-Employment Taxes.

How can QuickBooks Self-Employed help me manage my taxes and forms?

 

If you need further assistance with handling your self-employed taxes, you may reach out to our representatives. Here's how to contact QuickBooks Self-Employed Support.

 

Let me know how if you have other questions by leaving a comment below. I want to make sure you can account the taxes properly, and I'm here to provide further assistance whenever you need it. Cheering you a productive week!

View solution in original post

3 Comments
Jen_D
Moderator

Are Federal Refunds, Federal/State Tax Payments Categorized as Personal or Business Expense?

Hello there, @kristinasan-biz,

 

Tax payments, both for Federal and State are usually tagged as Business as they are company expenses. However, when recording refunds, you can tag them as Personal then exclude the refunded payment in your QuickBooks Self-Employed account.

 

Doing this will remove the payment from the transactions indicating that it has been refunded. Here's how to exclude them:

 

  1. Go to the Transactions tab and locate the Federal payment.
  2. Click to expand the transaction then mark the Exclude option at the bottom.
  3. Hit Save.

Next, if you connected your bank and downloaded the refund transaction, manually change the category as Personal.

Refer to these resources to learn more about recording taxes in QBSE:

 

Self-Employment Taxes.

How can QuickBooks Self-Employed help me manage my taxes and forms?

 

If you need further assistance with handling your self-employed taxes, you may reach out to our representatives. Here's how to contact QuickBooks Self-Employed Support.

 

Let me know how if you have other questions by leaving a comment below. I want to make sure you can account the taxes properly, and I'm here to provide further assistance whenever you need it. Cheering you a productive week!

View solution in original post

jason-daily
Level 1

Are Federal Refunds, Federal/State Tax Payments Categorized as Personal or Business Expense?

how do i record a state tax refund on an llc's bank account? right now qbo has called it uncategorized income. its not income so i need to know what category it should be in. please advise asap. and where do i look for the answer and how will i know i have an answer?

JasroV
QuickBooks Team

Are Federal Refunds, Federal/State Tax Payments Categorized as Personal or Business Expense?

Nice to have you joined this thread, Jason.

 

We can use a bank deposit to record a tax refund in your QuickBooks Online (QBO) account. However, I’d recommend working with your accountant for guidance on which category it’ll be posted. 

 

Nevertheless, here's how to record bank deposit:

 

  1. Go to the + New menu.
  2. Select Bank Deposit.
  3. Enter the account and complete the details of the deposit.
  4. Then click Save and close.

 

You can also check this article for more details about the process: Record and make bank deposits in QuickBooks Online.

 

In case you don’t have an accountant, you can visit our ProAdvisor page and we’ll help you find one from there.

 

Furthermore, I’ve added these links that you can use for guidance in filing your taxes seamlessly in the future:

 

 

Keep me in the loop if you need further assistance recording tax refunds or filing your taxes online. I’m always around ready to lend a helping hand. Keep safe and have a great weekend ahead!

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