To accurately show withholding tax on supplier bills, begin by setting up an expense account and a service line item, Soha. I'll guide you through the steps to accomplish this efficiently.
In setting an expense account, it's always a good idea to consult with your accountant to ensure everything is set up correctly. To simplify the process, follow the steps below:
- Go to Settings, then select Chart of accounts.
- Select New.
- From Account Type dropdown, choose Other Expense.
- From Detail Type dropdown, click Other Miscellaneous Expense.
- Name the account Withholding Tax Expense, then Save.
After that, continue by managing a service item, and be sure to utilize the expense account you recently created. For detailed guidance, refer to Step 2 in this reference: How do I record tax withheld.
Once done, you can add it as a line item in bills. Make sure to enter the amount as negative to ensure it is correctly deducted from the bill. Here's how:
- Hover to the +New button and select Bill.
- Click the Item details dropdown and add your created service item in the Product/service column.
- Put the amount and mark it as a negative.
- If finished, hit Save and close.
On the other hand, to remain tax-compliant, start by filing and paying your taxes through QBO.
Know that I'm always up and available whenever you have tax concerns or any QBO-related. Feel free to reach out anytime by hitting the Reply button below. Looking forward to assisting you.
