Skip to main content
Jul 29, 2024 6:53 PM UTC
Question

I have created a current Liability account to post installment payments for Income tax owing as a sole proprietor. How do I now enter the amount owing ?

I have received my assessment and need to enter CPP, and Income tax owing as well as interest. Where/how do I do this? 

2 replies

Jul 29, 2024 7:03 PM UTC

Normally Payroll Clearing is used for outstanding Payroll Amounts - Create Journal Entry:

Debit - Payroll: CPP Expense (Expense Account)

Credit - Payroll Clearing (Liability Account)

 

Assuming interest pertains to outstanding income tax - Create Journal Entry:

Debit - Income Tax Expense  (Expense Account)

Debit - Interest on Income Tax  (Expense Account) - Make sure this is kept separate because this amount is non-deductible when filing taxes

Credit - Income Tax Payable (Liability Account)

Jul 29, 2024 7:25 PM UTC

Hello wernigs4-shaw-ca,

 

It's a pleasure to see you in Community.  Welcome! It's essential that your installment payments for Income tax owing, are recorded accurately in QuickBooks Online, to ensure they're aligned with government guidelines.  I recommend speaking with an accounting professional for their expertise and best course of action. If you don't have an accountant, we can help you locate a ProAdvisor in your local area. 

 

If you have any other questions, feel free to reach back out. We would be glad to help!