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Rkid
Level 2

Irs refund

I received a 1.00 refund check from the irs for overpayment. The check was deposited with payments from customers. How do I record that 1.00 refund? I use gusto for my tax deposits and quickbooks records it as a journal entry. 

Solved
Best answer December 31, 2020

Best Answers
Adrian_A
Moderator

Irs refund

We can create a Deposit to record the refund, Rkid.

 

If the company is taxed as a corporation, we can use the expense account of the taxed paid. However, if it's a sole proprietor or partnership,  it's your personal income.

 

If you choose to put it into the business, we can use the Owner's Investment account.

 

Before doing so, I'd still recommend reaching out to your accountant for the appropriate accounts to use.

 

Let me guide you with these steps:

 

  1. Click the + New button.
  2. Under OTHER, select Bank deposit.
  3. Select the account to which the refund comes from in the Account field.
  4. Select to whom you received the amount.
  5. Select the taxes paid expense account or the Owner's Investment account  in the ACCOUNT column.
  6. Select a PAYMENT METHOD.
  7. Enter the AMOUNT.
  8. Click Save and close.

 

If you want to access payroll tax forms and payments, you may check this reference: Access payroll tax forms and tax payments.

 

I'm just a post-away if you need help. Keep safe!

View solution in original post

Rkid
Level 2

Irs refund

Hi, thanks for your quick response. I believe I need to setup a tax expense account. Currently I use a service called gusto to forward taxes to the irs. QuickBooks automatically records the transaction as a journal entry. But it’s not tied to any expense account. I believe once I setup an expense account for it Incan record the refund. Does that sound right?

View solution in original post

JessT
QuickBooks Team

Irs refund

Hi Rkid,

 

Thanks for the additional details. I'll continue to help you out and clarify the steps.

 

In this case, you can follow Adrian's steps to deposit the refund along with your customer's payment. That way, you can match the deposit with the downloaded bank transaction.

 

 

If the refund was already exported to QuickBooks as a journal entry, you can edit it and replace the asset account with Undeposited Funds. That way, you can still deposit it along with the invoice payment.

 

As for the account that you'll use on the refund, we're unable to provide advice for that. You can ask your accountant to make sure you assign the right one.  However, with regards to How-do-I's, you can always go back to this thread.

 

You can also find more references by clicking on Help and searching for the topics you like.

 

Happy new year!

View solution in original post

6 Comments 6
Adrian_A
Moderator

Irs refund

We can create a Deposit to record the refund, Rkid.

 

If the company is taxed as a corporation, we can use the expense account of the taxed paid. However, if it's a sole proprietor or partnership,  it's your personal income.

 

If you choose to put it into the business, we can use the Owner's Investment account.

 

Before doing so, I'd still recommend reaching out to your accountant for the appropriate accounts to use.

 

Let me guide you with these steps:

 

  1. Click the + New button.
  2. Under OTHER, select Bank deposit.
  3. Select the account to which the refund comes from in the Account field.
  4. Select to whom you received the amount.
  5. Select the taxes paid expense account or the Owner's Investment account  in the ACCOUNT column.
  6. Select a PAYMENT METHOD.
  7. Enter the AMOUNT.
  8. Click Save and close.

 

If you want to access payroll tax forms and payments, you may check this reference: Access payroll tax forms and tax payments.

 

I'm just a post-away if you need help. Keep safe!

View solution in original post

Rkid
Level 2

Irs refund

Hi, thanks for your quick response. I believe I need to setup a tax expense account. Currently I use a service called gusto to forward taxes to the irs. QuickBooks automatically records the transaction as a journal entry. But it’s not tied to any expense account. I believe once I setup an expense account for it Incan record the refund. Does that sound right?

View solution in original post

JamesDuanT
Moderator

Irs refund

Thanks for getting back to us, Rkid.

 

When integrating third-party applications with QuickBooks Online, it requires you to map the fields for both programs. With that said, I'd recommend contacting the Gusto's support team. They can determine whether we can connect it to an expense account or not. 

 

Once you've mapped the fields and accounts correctly, the transactions will flow to QuickBooks Online without any issues. If the refund doesn't flow to QuickBooks Online automatically, we'll just have to record it manually. We can follow the steps provided by Adrian_A to record a deposit or refund.

 

We'll be right here if you have additional queries regarding the setup.

Rkid
Level 2

Irs refund

Sorry maybe I’m not understanding or explaining the issue fully. The deposit is already recorded in quickbooks because my bank account is linked and it recognized the deposit. The other checks that were deposited at the same time have all been matched because they were all recorded payments from paid invoices. There is no invoice to match the irs refund from though. So how do I create a transaction to match it to. 

JessT
QuickBooks Team

Irs refund

Hi Rkid,

 

Thanks for the additional details. I'll continue to help you out and clarify the steps.

 

In this case, you can follow Adrian's steps to deposit the refund along with your customer's payment. That way, you can match the deposit with the downloaded bank transaction.

 

 

If the refund was already exported to QuickBooks as a journal entry, you can edit it and replace the asset account with Undeposited Funds. That way, you can still deposit it along with the invoice payment.

 

As for the account that you'll use on the refund, we're unable to provide advice for that. You can ask your accountant to make sure you assign the right one.  However, with regards to How-do-I's, you can always go back to this thread.

 

You can also find more references by clicking on Help and searching for the topics you like.

 

Happy new year!

View solution in original post

Rkid
Level 2

Irs refund

I understand now. Thank you all for the help. 

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