In the Accrued Liabilities line item under Current Liabilities:
1.) Should Sales Tax (on sales that have been already made) that are still due be included? 2.) If Income Taxes are included in this line item - Should the number here be the total of prepaid estimated taxes that were paid in the last tax year, as the current year's taxes are still not final?
@john-pero Can you please explain in more details why if sales tax liability and payroll tax liability have each their own account, then they should not be included in the current liability line item in the balance sheet? If they each have their own account in the chart of accounts, what type of account should it be?
One exception would be State Franchise Taxes (also often referred to as income taxes since they are based on income). These are an expense recorded on S Corp books annually. In CA, we must pay $800 by March 15 each year for the upcoming year even with zero revenue and that is an expense.
Since at year end we owe 1.5% of net income, most companies must pre-pay estimate quarterly to avoid penalties and interest. These payments are booked as Prepaid expense on balance sheet until year-end when the amount owed is known and that amount is then moved to an expense on P&L.
Any overpayment can be refunded or remain in prepaid account to apply to the following year.