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StormTrance
Level 1

How to account for tax in split transaction expenses

First off, brand new here so I apologize if I post  this in the wrong forum.

 

If I enter an expense and split the transaction, where do I put the tax? I presume it's not to go "Taxes & License".

 

I am correct in saying you don't normally need to record tax of expenses separately?

Solved
Best answer February 03, 2021

Best Answers
MonicaM3
QuickBooks Team

How to account for tax in split transaction expenses

Welcome back @StormTrance,

 

To make sure I understand, you paid for an expense from a “Vendor”. It contained 2 items, one of which will be billed to your customer.

In this scenario, you would simply include the item on the invoice to your customer and either adjust the amount to cover the sales tax paid or add sales tax to that invoice. How you handle it depends on what your normal business practice is.

 

For information on how to set up Sales Tax, check out this resource: Set up Sales Tax in QuickBooks Online

 

Let me know what else I can help with. Take Care!

View solution in original post

4 Comments
MonicaM3
QuickBooks Team

How to account for tax in split transaction expenses

Hi there @StormTrance!

 

Welcome to the Community, you are absolutely in the right place. We are always here to help answer any questions you may have about QuickBooks.

When you enter and pay an Expense you wouldn’t typically split out the taxes you are paying. If you have a bill or expense to pay that has a line item for tax, those taxes are accounted for and paid by the Vendor to whom you paid them.

So, you are correct. You don’t normally need to record the tax included in expenses separately.

You can always check with your accountant if there are special circumstances.

I’ll keep an eye out for any additional questions. Feel free to ask anytime. I’ll be here to help.

StormTrance
Level 1

How to account for tax in split transaction expenses

That makes sense. Thanks!

 

For the particular expense I'm wondering about is where 2 items were bought. One is being billed to the customer. The other is not. Does that make sense? 

MonicaM3
QuickBooks Team

How to account for tax in split transaction expenses

Welcome back @StormTrance,

 

To make sure I understand, you paid for an expense from a “Vendor”. It contained 2 items, one of which will be billed to your customer.

In this scenario, you would simply include the item on the invoice to your customer and either adjust the amount to cover the sales tax paid or add sales tax to that invoice. How you handle it depends on what your normal business practice is.

 

For information on how to set up Sales Tax, check out this resource: Set up Sales Tax in QuickBooks Online

 

Let me know what else I can help with. Take Care!

View solution in original post

StormTrance
Level 1

How to account for tax in split transaction expenses

Thanks so much!! 

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