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Level 1

Income tax payments show up in P&L report.

I've been entering Federal and State tax payments using an Expense or Other expense account, but both methods decrease my P&L. Is this the way it should be? I'm confused, shouldn't profit not reflect taxes paid?

What's the correct way of entering taxes paid? I followed a similar post in this community where the advise was to enter as Other Expenses but that still shows up on P&L.

 

Thanks!

 

 

1 Comment
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Moderator

Income tax payments show up in P&L report.

Hello there, diegoborgh.

 

You'll want to record the tax payments on your payroll account. Here's how:

 

  1. Go to the Taxes & Forms tab.
  2. Select Pay Taxes.
  3. Select Create Payment on the tax you want to pay.
  4. Always choose Earliest as it's the recommended date to pay taxes, then select Approve.
    • Earliest means the next available payment date. The next available payment date is two business days from the date you approve this tax payment.
    • Other allows you to specify a date in the future to make the payment.
    • Latest means we'll process the payment to deposit on the actual due date for the tax payment.
  5. The system will give you an e-payment confirmation after approving.

Once done, pull up the P&L report once again to verify if income tax payments still show up on the report.

 

I'd appreciate it if you'd update me how it goes. I want to make sure everything is taken care of for you.

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