I’ll share a way to handle your client’s Federal Excise Tax (FET) in QuickBooks Online Accountant (QBOA), @schand4462. This way, we can keep their entries tracked within their company file.
Before we start, let’s create a service or non-inventory item for the Truck Tires. We can use this upon recording the transaction to your client’s book. Then, let’s create a liability account where we can map them. Here’s how:
- Go to the Transactions menu and select Chart of Accounts (COA).
- From there, tap the New button to create a liability account.
- Select an Account Type, Detail Type, and enter a Name that you can easily identify.
- After that, hit Save and Close.
Given that your purchases have already been recorded to this account, we can begin entering its payments by creating expense transactions affecting this account; and add the tire truck as another line item. Please follow the steps below to record them properly:
- Tap the + New icon and select Expenses.
- Select the Payee to whom you’re paying the transaction.
- Choose the Payment account.
- In the Category details section, select the Liability Account and enter the FET amount in negative (-).
- Then, enter the Truck Tires under the Product/Service field and add the Amount to its respective section.
- Once done, tap Save and Close.
When paying the California Department of Tax and Fee Administration, let’s set them up first as your vendor as we will need this for recording. Then create an expense transaction to pay them.
Make sure to close your books when you're prepared to end the year. This will prevent any unwanted modifications before submitting your taxes. By doing this, you will be able to lock your books and keep your accounting data from being altered by anyone until the closing date.
Let me know if you have other concerns about taxes, I’m always here to help. Take care!
