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tkatke
Level 2

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.

Solved
Best answer December 13, 2018

Best Answers
Rustler
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.

 

 

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11 Comments 11
HoneyLynn_G
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!

Rustler
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.

 

 

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.

fryedinaz
Level 1

Recording a Sales Tax Penalty

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

Starik
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?

AileneA
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! 

LC711
Level 2

Recording a Sales Tax Penalty

But Recording it this way creates two separate checks?  I’m trying to keep it all in one check so it reconciles easier. 

LC711
Level 2

Recording a Sales Tax Penalty

So when you make the adjustment, how do you locate it in your liabilities in order to attach it to the tax payment?  My tax payment won’t allow me to add expenses like a typical check. 

JoesemM
Moderator

Recording a Sales Tax Penalty

Thanks for joining this thread, @LC711.

 

I'd like to make sure that we're on the same page, so I give you the right amount of information. Can you share more details about your concern and how you set up the adjustment? Any extra details about this concern would be greatly appreciated.

 

I'll be keeping an eye on your response on this thread and we'll take it from there. Have a good one, @LC711.

JamieMarshall
Level 1

Recording a Sales Tax Penalty

Were you ever able to find a solution for this?

DivinaMercy_N
Moderator

Recording a Sales Tax Penalty

Hello there, Jamie. 

 

To ensure we're on the same page, could you tell me additional details regarding your sales tax concern? This way I can be able to provide an accurate and timely solution to resolve your issue.

 

I'll be waiting for your response. Have a good day ahead and stay safe always.

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