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Recording a Sales Tax Penalty

I filed my quarterly sales tax late and received a $50 penalty. The late filing penalty was added to the balance due for the sales tax and I made one payment for both the tax I owed and the penalty. I now need to record that sales tax payment in QuickBooks but I don't know how to record the $50 penalty.

 

Normally when I record the sales tax payments if the amount I paid to the state was any different than what QB says I owe, I could just click the Adjust button and record the sales tax adjustment. But in this case the extra $50 that I paid is not a sales tax adjustment, it isn't an extra $50 in taxes that I paid, it's a $50 penalty. I'm not sure what to do.

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Best answer 12-13-2018

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Established Community Backer ***

Re: Recording a Sales Tax Penalty


@tkatke wrote:

I filed my quarterly sales tax late and received a $50 penalty. The late filing penalty was added to the balance due for the sales tax and I made one payment for both the tax I owed and the penalty. I now need to record that sales tax payment in QuickBooks but I don't know how to record the $50 penalty.

 

Normally when I record the sales tax payments if the amount I paid to the state was any different than what QB says I owe, I could just click the Adjust button and record the sales tax adjustment. But in this case the extra $50 that I paid is not a sales tax adjustment, it isn't an extra $50 in taxes that I paid, it's a $50 penalty. I'm not sure what to do.


Actually it is part of the sales tax amount that you pay.

 

use adjust sales tax, set it to increase, select a penalty expense account you create first in the chart of accounts, and enter the amount, then pay all sales tax.

 

 

4 Comments
QuickBooks Team

Re: Recording a Sales Tax Penalty

Hi there, @tkatke.

 

Thanks for providing a clear information about your concern. I can help you record the sales tax penalty in QuickBooks.

 

You will have to create an expense transaction to record the penalty. I'll walk you through the process:

  1. Click Banking.
  2. Choose Write Checks.
  3. Enter the information needed.
  4. Make sure to choose the Expenses tab.
  5. Click Save & Close.

 

For in-depth information, please refer to this article: Create, modify, and print checks. I also advise consulting your accountant if you need further assistance in recording the sales tax penalty.

 

Keep me posted if you have other questions about QuickBooks. Have a good one!

Established Community Backer ***

Re: Recording a Sales Tax Penalty


@tkatke wrote:

I filed my quarterly sales tax late and received a $50 penalty. The late filing penalty was added to the balance due for the sales tax and I made one payment for both the tax I owed and the penalty. I now need to record that sales tax payment in QuickBooks but I don't know how to record the $50 penalty.

 

Normally when I record the sales tax payments if the amount I paid to the state was any different than what QB says I owe, I could just click the Adjust button and record the sales tax adjustment. But in this case the extra $50 that I paid is not a sales tax adjustment, it isn't an extra $50 in taxes that I paid, it's a $50 penalty. I'm not sure what to do.


Actually it is part of the sales tax amount that you pay.

 

use adjust sales tax, set it to increase, select a penalty expense account you create first in the chart of accounts, and enter the amount, then pay all sales tax.

 

 

BRC
Established Community Backer ***

Re: Recording a Sales Tax Penalty

Yes an adjustment is the best way as it both lets you accrue the expense to the correct period and then create one sales tax payment check to represent  the one check you actually issued to the state.

Not applicable

Re: Recording a Sales Tax Penalty

It's an expense to the company not an accrued liability. Expense it.

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