I have a 3rd party sales tax consultancy who calculates how much sales tax to pay each state every month. They deduct the amount from our account the following month for the taxes due. So, Jan sales taxes are paid out in Feb. How do I correctly record these payments to show up in the correct month? The payments are downloaded in my bank feed.
I created a Sales Tax Liability account as suggested.
When income from our credit card company and PayPal come into our account, they come in with Sales Tax added. By the 15th of the following month, we pay our sales taxes to individual states via our 3rd party Tax Consultant. These payments are automatically withdrawn and come into QB Online via our bank feed.
I know that there are some journal entries that need to happen monthly to account for all of this so that our income isn't overstated and the tax paid moves into the liability account and shows up properly in the balance sheet. Or perhaps I accomplish this with a bill so that the liability comes out in the correct month?Can you please help me figure that out?
How do I remove the tax from the Product Income account then move it to Sales Tax Liability?
Thanks for getting back here in the Intuit Community, @GGfrn.
Yes, you can make a journal entry to adjust or correct transactions and post entries that cannot be performed in other ways, such as adjustments to profit and loss. For this, I'd recommend reaching out to your accountant to make sure the correct accounts are used.