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Best answer July 31, 2021
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I'll be glad to help you record an invoice payment where the customer pays a portion for the tax, @Mida Valo.
If your customer pays their invoice but withholds tax, use a credit note to charge off the withholding tax as an expense. Doing so will mark the invoice as paid in full.
To begin, set up a withholding tax expense account:
- Go to the Gear icon, and choose Chart of Accounts.
- Click New.
- From the Account Type drop-down, select Other Expense.
- From the Detail Type drop-down, choose Other Miscellaneous Expense.
- Name the account Withholding Tax Expense.
- Once done, click Save.
Then, set up the withholding tax expense item:
- Select the Gear menu, and choose Products and Services.
- Click New, then select Service.
- Name the item Withholding Tax.
- From the Income account drop-down, choose the withholding tax expense account that you created.
- Once done, click Save and close.
Then, proceed to Steps 3 and 4 in this article to complete the process: How do I record tax withheld by my customer?.
I'm also adding this resource to help you manage invoice fees in QuickBooks: Record invoice payments in QuickBooks Online.
Keep in touch if you have other questions about handling invoices in QuickBooks. I'll be happy to lend a helping hand. Stay safe always.
I'll be glad to help you record an invoice payment where the customer pays a portion for the tax, @Mida Valo.
If your customer pays their invoice but withholds tax, use a credit note to charge off the withholding tax as an expense. Doing so will mark the invoice as paid in full.
To begin, set up a withholding tax expense account:
- Go to the Gear icon, and choose Chart of Accounts.
- Click New.
- From the Account Type drop-down, select Other Expense.
- From the Detail Type drop-down, choose Other Miscellaneous Expense.
- Name the account Withholding Tax Expense.
- Once done, click Save.
Then, set up the withholding tax expense item:
- Select the Gear menu, and choose Products and Services.
- Click New, then select Service.
- Name the item Withholding Tax.
- From the Income account drop-down, choose the withholding tax expense account that you created.
- Once done, click Save and close.
Then, proceed to Steps 3 and 4 in this article to complete the process: How do I record tax withheld by my customer?.
I'm also adding this resource to help you manage invoice fees in QuickBooks: Record invoice payments in QuickBooks Online.
Keep in touch if you have other questions about handling invoices in QuickBooks. I'll be happy to lend a helping hand. Stay safe always.