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debbie37
Level 1

What account do i enter income tax payments under

i have paid provisional tax for my company . how do i set up the correct account in the chart of accounts

21 Comments 21
Rajanikanth
Level 6

What account do i enter income tax payments under

Hi, Debbie

Create an expense type account called Income Tax from the Chart of accounts.                                                                

Account Type - Expense,   *Detail Type - Tax Paid, *Name - Income Tax.

Comment back for further clarifications.


jan25
Level 1

What account do i enter income tax payments under

Is this correct as it shouldn't go in the profit and loss as an expense?
Rajanikanth
Level 6

What account do i enter income tax payments under

Hi, Jan Tax payment is not a Taxable expenditure your tax preparers know this but for the accounting, purpose treat it as the expenses if taxes are paid / if taxes are only estimated then treat it as the liability by creating a bill for the Tax department.

Comment back for further clarifications.
Elene
Level 2

What account do i enter income tax payments under

Hi all tax payments should go to a current liability account for now.

Called Tax Payable. 

When  tax are calculated and a provision is created at the end of the financial year you will create a journal debit tax expense credit tax payable.

The balance in the liability account is the balance that should be paid to SARS.

Let me know if you need any further assistance in setting this up.

 

Enjoy your day!

 

Yachad
Level 1

What account do i enter income tax payments under

While I agree with all they said about tax payable for tax that has not been paid yet, when it is paid, federal income tax should go in an "other expense" account. I named the account "federal income tax," then set it up as an "other expense" account. The instructions for "other expense" accounts says that they are for things like federal income tax and lawsuits and other non-deductible expenses. When Quickbooks prints a P&L, it gives a total without those "other expense" accounts and a separate total after.

Jamie Houghton
Level 1

What account do i enter income tax payments under

How do you do this I'm struggling to figure this out

jclevengerjr
Level 1

What account do i enter income tax payments under

Hi Raj,

So, I have set up 2 Tax Liability Accounts Called "State Tax Payable" and "Federal Tax Payable".

 

I have a 2 "Other Expenses" account called "State Income Tax" and "Federal Income Tax"

 

I'm struggling with how to create my liability and then pay my taxes with an offsetting transaction in my liabilities account as it is paid. 

 

How do I do this in the easiest manner?

Randhir Jha
Level 1

What account do i enter income tax payments under

How to entry for tax payment in quickbooks 

RaymondJayO
Moderator

What account do i enter income tax payments under

Let's go to the Payments tab to record your tax payment in QuickBooks Online (QBO), @Randhir Jha . You'll first have to make sure you've already turned on the tax tracking feature in the program. Once confirmed, proceed with the steps below. 

  1. Select Taxes from the left menu. 
  2. Go to the Payments tab. 
  3. Click Record payment.
  4. Choose the appropriate bank account. 
  5. Enter the Payment date, its amount, and Memo
  6. Click Save.

 

The two screenshots below show you the steps. 

 

 

Once done, I recommend running the VAT Summary and VAT Detail reports to ensure your tax amounts are accurate. Then, go to the Returns tab from the Taxes menu to mark your form as filed in QBO. For the detailed instructions, see this article's How do I file? section: Filing And Paying Tax/GST

 

I'll lend a helping hand if you need anything else. Enjoy the rest of your day, @Randhir Jha .

Crazycakes
Level 1

What account do i enter income tax payments under

Hi, I have a tax payment, but it is not for VAT.  It is for mid year tax. Where is the section to log this? It is not an expense I can claim on, so needs a payment section for this. 

Please help.

Thanks

MaryLandT
Moderator

What account do i enter income tax payments under

Hi there, Crazycakes,

 

I'm here to clear things out about recording tax payment in QuickBooks Online (QBO).

 

If the payment is made for a transaction in QBO, you'll want to create an entry and allocate the tax code. Doing this will help show the sales tax amount you've paid.

 

If not, you'll have to record the tax payment as an expense. Upon sharing this, I suggest consulting your accountant for specific instructions on how to handle the payment. This is to ensure the entry is included on your mid year taxes.

 

Let me know if you need additional information by clicking the Reply button below. I'm always right here to help.

surchling
Level 3

What account do i enter income tax payments under

Why can't QBO create an income tax expense account that doesn't show on our P&L especially on the dashboard?
It seems to me that to have both an income option and an expense option for account that do not affect the P&L should be quite simple to code for and simplify our worlds.

katherinejoyceO
QuickBooks Team

What account do i enter income tax payments under

Thanks for joining in this thread, @surchling

 

The profit and loss (P&L) report shows the summaries of your revenues, costs, and expenses incurred on a specific period, usually a fiscal quarter or year.

 

It also lists expenses related to taxes to determine pre-tax income and subtract any tax payments to determine the net income after taxes. 

 

Also, the income tax expenses will show up if the Income Tax Expense is used on checks or expense transactions. 

 

To make sure your books are accurate, I'd recommend reaching your accountant for further assistance on how you can tag the next income tax in QuickBooks. 

 

For future reference, read through this article: FAQ: How to use year-end reports. It answers most of your questions about year-end reports. 

 

Feel free to message again if you have additional questions. We're always delighted to assist. 

 

 

surchling
Level 3

What account do i enter income tax payments under

Yes, I understand that but I have CoVid Cash Boost payments that are received into my bank account but not income so I have the same issue just in reverse as Company Income Tax payment - money is removed for bank account but its not an expense.
It would be lovely to be able to have an income and an expense account for those particular transactions.

AlexV
QuickBooks Team

What account do i enter income tax payments under

Hi there, surchling.

 

It's best to reach out to your accountant so they can further assist you in handling CoVid Cash Boost payments. 

 

You can also visit our QuickBooks Help Page if you need articles and references in managing your business.

 

We'll be here if you have more questions. Stay safe and healthy!

Gran123
Level 1

What account do i enter income tax payments under

Thank you for posting! Once I have the total amount and account set up, how do I show payments made?

 

katherinejoyceO
QuickBooks Team

What account do i enter income tax payments under

Thanks for following this thread, @Gran123. I'd be happy to share with you the steps to show the income tax payments made in QBO. 

 

Once I have the total amount and account set up, you can now enter the tax payment in QuickBooks. Here's how: 

 

  1. Go to the Taxes menu, then click the Payments tab. 
  2. Click Record payment.
  3. Choose the appropriate bank account. 
  4. Enter the Payment date, its amount, and Memo
  5. Click Save.

 

Once done, run the VAT Summary and VAT Detail reports to review your tax payments. 

 

For future reference, check out this link to learn more about filing and paying Tax/GST

 

I'll be here to lend a helping hand again if you need more help. Take care!

MHOP
Level 1

What account do i enter income tax payments under

HI Catherine.

You are referring to VAT - not TAX. Two completely different things.

I also want to know how to capture a Provision for tax DR journal (not the Balance sheet account) ,without showing it as an expense, as SARS TAX is not an 'expense' - it is a below the line item and should therefore be shown below the PROFIT on the P & L.

BUT HOW ON EARTH DO I DO THIS ????

gameandcandy
Level 1

What account do i enter income tax payments under

thank you for the info i was wondering what you put for the tax line mapping ?

TrevorK
Level 1

What account do i enter income tax payments under

I have issues with my payroll so i decided to create a payroll control account(liability) and an expense a/c that is Salary .Where then I debit my expense a/c and credit my Control A/c that is Income Tax and Net Pay I'm I doing the right thing please help

Elene
Level 2

What account do i enter income tax payments under

Hi

 

So your income statement account should be your nett pay + uif 2% + PAYE (total company contribution) and should reconcile to your EMP501. 

Your balance sheet account should only be the amount owed to SARS at the end of the period and should clear out if you paid them by the 7th.

 

Your journal should be

dt: Salaries (income statement) (For salaries , UIF + SDL + PAYE)

kt : Payroll clearing

(This is usually done by your payroll software)

 

THEN once PAID the payment is taken to the payroll clearing account

Salaries paid + SARS paid

 

This will clear the payroll clearing each month.

Just remember to pull a PAYE statement of account each month and to account for interest and penalties if there where any.

 

Hope this helps.

Have a great day