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timd1971
December 11, 2018
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Federal tax payments. What account do these go under?

  • December 11, 2018
  • 1 reply
  • 0 views

You know, those HUGE chunks of cash that go to the IRS every year due by April 15 (yes, and/or quarterly payments).

Does this go under EXPENSES type, is this correct? i.e.:

TAXES

   Federal

   State

   Local

or

create under "OTHER EXPENSES" type this way?  would this data be handled differently then?

I guess I am confused those huge tax payments are actual EXPENSES or not?  Not sure if that would be interfering with the current years tax liability?

    Best answer by arkvalleyinfo

    Federal Income taxes are not an expense but cost of doing business.  Depends on your tax type of business as to were the entry will go too.  If, Sch C will end up as Owners Drawings, Corp's etc. into Equity.  Review this with your CPA for proper entries into QB.

    1 reply

    A
    arkvalleyinfoAnswer
    December 11, 2018

    Federal Income taxes are not an expense but cost of doing business.  Depends on your tax type of business as to were the entry will go too.  If, Sch C will end up as Owners Drawings, Corp's etc. into Equity.  Review this with your CPA for proper entries into QB.

    T
    timd1971Author
    December 11, 2018
    Ok...kinda figured that...but didn't queztion this until now.  My QB ProAdvisor set this up as example above (as expenses) and have wondered about it.
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