WithHolding Tax

atif patel · ‎January 26, 2021

Hello,

I have a problem. need to know how to account for with holding tax in quick books.

the problem is that when we received payment from our customer, the deduct to 2 different withholding tax for 2 different tax bodies.

1 ) the tax is deducted on the overall amount of the invoice and

2) other tax is deducted on the sales tax which we have included in the invoice ( it is done inorder to puta check and balance by the tax authorities) they deduct 20% of sales tax amount as a withholding tax.

RCV · ‎January 26, 2021

Thanks for bringing this one to our attention, atif patel.

When recording "withholding tax", we need to make sure we set up the withholding tax expense account and withholding tax expense item correctly. Also, if your customer pays their invoice but withholds tax, use a credit note to charge off the withholding tax as an expense. This also marks their invoice as paid in full. For more detail about this one, see the How do I record tax withheld by my customer? article.

Then, try creating an invoice again. If the same thing happens, let's try signing in to QuickBooks Online (QBO) using a private or incognito window. This mode doesn't use the existing cache data and helps us confirm browser-related issues. Here's how:

For Google Chrome browser: Ctrl + Shift + N
For Mozilla Firefox browser: Ctrl + Shift + P
For Safari browser: Command + Option + P

If it works, go back to your regular browser and clear the cache to delete those temporarily stored files and browsing history. The overtime collection of data can create corruption, however, removing this should fix the issue. You can also use other supported, up-to-date browsers to roll out the possibility of a browser-related issue.

Feel free to visit our Manage Customers and income page for more insights about managing your customer transactions.

I'd like to know how you get on after trying the steps, as I want to ensure this is resolved for you. Just reply to this post and I'll get back to you. Take care always.

atif patel · ‎January 26, 2021

Thanks for the prompt response.

I just tried the solution and there are two withholding in a single receipt. it has catered with the one but what about the other withholding.

secondly, how to interlink the withholding taxes with the income tax and sales tax ledger.

FritzF · ‎January 26, 2021

Thanks for getting back to us, @atif patel.

You can set up another tax expense account and tax expense item for the other withholding. You can follow the same steps shared by my colleague above or refer to this article: How do I record tax withheld by my customer?

As per your second concern, it'd be best to consult with an accountant or accounting professional for further guidance on linking withholding taxes with the income tax and sales tax ledger. This is to ensure that there will be no discrepancies to your books.

For tips and other resources, I recommend visiting our website for reference: Self-help articles.

Leave a comment below if you have any other questions or concerns. I'm always here to assist. Have a good one!