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ketan-parmar-web
Level 1

How to record withholding tax

how to Create Tab for withholding tax
1 Comment 1
KimberlyS
QuickBooks Team

How to record withholding tax

I appreciate you visiting the Community, ketan.

 

I'll provide some information to help you record withholding taxes within the program.

 

In QuickBooks Online, there are instances in which you need to account for withholding tax deductions on a customer invoice. To begin with, you'll need to set up a withholding tax expense account.

 

Here's how:

 

  1. Proceed to the Gear icon.
  2. Select Chart of accounts, then New.
  3. Choose Other Expense from the Account Type dropdown.
  4. From the Detail Type dropdown, select Other Expense.
  5. Use Withholding Tax Expense as the account name, then click Save.

 

After that, follow these steps to set up a withholding tax expense item:

 

  1. Head to the Gear icon, then choose Product & Services.
  2. Click on New and choose Service.
  3. Use Withholding Tax as an item name.
  4. Choose the withholding tax expense account you've created from the Income account dropdown.
  5. Select Save and close once done.

 

Moreover, proceed to Steps 3 and 4 in this article to complete the process: How do I record tax withheld by my customer?

 

On the other hand, please know there's already a default tab where you can manage your taxes in the software. Here's how you can locate them:

 

  1. On the left navigation panel, select Taxes.
  2. You'll see the Returns and Payments tab.

 

For more information about managing sales tax payments with QuickBooks, you can review these materials:

 

 

Furthermore, you might want to scan this resource for guidance on reviewing transactions included in each box on the tax return base in your tax settings: Tax Detail Report.

 

Feel free to add a comment on this post if you have additional questions regarding withholding taxes or other related concerns in QuickBooks Online. We're always around to help.