Mike,
If I start my new tax year knowing that I have to pay instalments totalling say $10,000, would this not have to be recorded as a current liability? As I make payments, wouldn't the liability go down and the tax expense go up? Thus record the expense as it happens while showing a reduction in liability.
I see that you have suggested using a current asset type account but the payments aren't really an asset are they? It seems to me that as you make the payments you'd want to book the tax expense.
I am just trying to figure out how to record the transactions this way. I am not sure how to record the liability at the beginning of the tax year and then the combinations of entries after to make this happen.
Thoughts?
