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Level 1

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 December 13, 2018

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Highlighted
Level 15

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.

 

 

View solution in original post

6 Comments 6
Highlighted
QuickBooks Team

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!

Highlighted
Level 15

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.

 

 

View solution in original post

Highlighted
Anonymous
Not applicable

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.

Highlighted
Level 1

Recording a Sales Tax Penalty

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

Highlighted
Level 1

Recording a Sales Tax Penalty

I had a similar situation with the late sales tax payment penalty.  I paid sales tax with the penalty and applied for penalty forgiveness.   Recently, I received a check from the Department of Revenue. They returned my penalty back. So, I wonder how to enter this money?

Highlighted
QuickBooks Team

Recording a Sales Tax Penalty

Hi there, @Starik

 

Thank you for reaching out to the Community. 

 

I'm happy to know that you were able to receive the refund for the sales tax payment. Let me walk you through the steps on how to record it in QuickBooks:

 

  1. From the Banking menu, select Make Deposits.
  2. Make sure the right bank account is entered in the Deposit To drop-down menu.
  3. Select the right Date.
  4. Enter the details in the following fields:
    Received From: Select the name of the agency where you received a refund from.
    From Account: Enter the appropriate account.
    Amount: Enter the total amount of the refund.
  5. Click Save & Close

 

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Though, I'd recommend consulting with your accountant for you to be guided properly in applying the sales tax adjustments to your Chart of Accounts.  

 

I'm also including this helpful article for more information about handling sales tax in QuickBooks: Process sales tax adjustment

 

You can always get back to me if you have other questions and I'll do my best to help you out. Have a great day and Take care! 

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