Created with Sketch.Learn about PPP and Loan Forgiveness, stay informed with the latest changes.
Created with Sketch.Need help with 1099's or other Year End topics? Visit our Year End Resources page.
Created with Sketch.New to QuickBooks or using a new product? Visit our Get Started resource page to help you get going.
Created with Sketch.Need to make changes to your account? Visit the Account Manager Portal.
cancel
Showing results for 
Search instead for 
Did you mean: 
Level 2

In QBO, I created an expense for Corporate Tax. However, when I log an expense into this, it counts against Profit, but tax should not be considered in Gross Profit...?

 
Solved
Best answer March 04, 2020

Best Answers
Level 11

In QBO, I created an expense for Corporate Tax. However, when I log an expense into this, it counts against Profit, but tax should not be considered in Gross Profit...?

@PuraVida577 

 

In QBO, they don't have specific Account Type/Detail Type for Federal & State income taxes in the Chart of Accounts. Usually, most of the businesses, they ended using Other Expense as Account Type and for Detail Type, use Other Miscellaneous Expense.

 

It also depends on business type as well, some business entity will directly use the Equity account for recording taxes. You will need to ask your Accountant, what's right for your business.

 

Also, in QBO, there is no way to edit the P&L format either.

 

See the screenshots below for reference.

 

Hope this helps!

 

income-taxes.PNG

 

Pnl-format-with-income-taxes.PNG

 

View solution in original post

3 Comments
QuickBooks Team

In QBO, I created an expense for Corporate Tax. However, when I log an expense into this, it counts against Profit, but tax should not be considered in Gross Profit...?

Hi PuraVida577,

 

An expense decreases a corporation's retained earnings (which affects the gross profit). You'll want to change the expense account to a different one. 

 

Here's how:

  1. Click Expenses on the left menu.
  2. Go to the Expenses tab. 
  3. Locate for the transactions.
  4. Under the Action column, click Edit to change the account
  5. Click Save and Close.

To guide you on what category to choose, I recommend reaching out to your accountant.

 

For future reference, you can run a report for a specific account. Here's an article for more information: Run Reports.

 

Please touch base with me here for all of your QuickBooks needs, I'm always happy to help.

Level 2

In QBO, I created an expense for Corporate Tax. However, when I log an expense into this, it counts against Profit, but tax should not be considered in Gross Profit...?

Yes I know how to do all this.  My point is that QB does not have an option for entering TAX costs.  That is the question, and hence why I asked the community, I'm looking for an answer on how to do it technically, not how to do it from an accounting perspective.  I know how to record taxes from an accounting perspective, it appears QB does not have the option to do so?

Level 11

In QBO, I created an expense for Corporate Tax. However, when I log an expense into this, it counts against Profit, but tax should not be considered in Gross Profit...?

@PuraVida577 

 

In QBO, they don't have specific Account Type/Detail Type for Federal & State income taxes in the Chart of Accounts. Usually, most of the businesses, they ended using Other Expense as Account Type and for Detail Type, use Other Miscellaneous Expense.

 

It also depends on business type as well, some business entity will directly use the Equity account for recording taxes. You will need to ask your Accountant, what's right for your business.

 

Also, in QBO, there is no way to edit the P&L format either.

 

See the screenshots below for reference.

 

Hope this helps!

 

income-taxes.PNG

 

Pnl-format-with-income-taxes.PNG

 

View solution in original post

Sign in for the best experience
Ask questions, get answers, and join our large community of QuickBooks users.
Sign In / Sign Up

Need to get in touch?

Contact us