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