Withholding Tax on Sales Receipts

Hi there, @HAM9. Allow me to provide some steps so you can manage the withholding taxes on sales receipts in QuickBooks Online (QBO).

In QBO, you can record the tax withheld by your customer without creating a journal entry. First, you'll have to set up a withholding tax expense account to save all the withholding taxes you accumulated in one account for better tracking. You can follow the steps below:

1. Go to the Gear icon, then select Chart of Accounts.
2. Click New, then select the Expenses icon.
3. In the Save account under, select Other Expenses.
4. In the Tax form section, choose Other Miscellaneous Expenses.
5. Enter "Withholding tax" as the account name, then click Save.

After setting up an account, you can create a withholding tax expense item. Here's how:

1. Go to the Gear icon, then select Products & services.
2. Click New, then choose Service.
3. Enter "Withholding tax" as the item name.
4. In the Income account dropdown, select the withholding tax account you've created.
5. Select Save and Close.

Once done, you can create a sales receipt and add the withholding tax item to it. You may refer to the image below:

Moreover, you can read this article to record the withholding tax deduction on an invoice: How do I record tax withheld by my customer?

Also, you can use reports to view your sales and inventory status within the program.

Don't hesitate to comment back if you have other questions on managing sales receipts and withholding taxes in QuickBooks. We're at your service and ready to help. Have a great day!

@JuliaMikkaelaQ Looking at your screen shot there isa mistake. Line #1 would be 3,000 and line #2 w.tax would be -150 and total cash would be 2,850.

Your screenshot with the above correction would work in accounting but the productivity and sales report would look distorted. They would include a hypothetical "Withholding Tax" product/service with negative amount. Just a thought.