I do the bookkeeping for a company that had a Sales Tax audit by NY in 2021. They settled and paid $20K in owed taxes and $10K in penalties and interest. Should the penalties and interest part be categorized as expenses?
They are an expense to the business, but they are not reportable or deductible when filing income taxes.
Create an expense account as a type Other Expense, title it exp-non-deductible and post the payments there. When you do the P&L for tax time, be sure to NOT use the amounts in that account for the bottom line amount on the P&L
They are an expense to the business, but they are not reportable or deductible when filing income taxes.
Create an expense account as a type Other Expense, title it exp-non-deductible and post the payments there. When you do the P&L for tax time, be sure to NOT use the amounts in that account for the bottom line amount on the P&L
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