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X96mnn
March 1, 2021
Question

Tax paid on equipment not showing

  • March 1, 2021
  • 1 reply
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I bought equipment with a loan for $11500 of which $1500 was paid in HST. I had set up the asset for $11500 and a long-term liability loan entry for $11500 but this did not show the $1500 I paid in HST to deduct it from HST collected in my business. I then tried to set the asset up for $10000 and add the HST which I would offset with the long-term liability of $11500 but could not find a way to add the HST. 

 

How do I set this up so the HST I paid to the company I bought the equipment from reflects on my books? Does this need to be a manual entry on the Tax submittal?

1 reply

Rebecca R
Rebecca R
March 1, 2021

Hello X96mnn,

 

Welcome to the QuickBooks Community. It sounds like you've done a great job figuring out the best way to account for your equipment purchase and loan. Accounting for the HST that you paid on this purchase is crucial, so I want to help you out with correctly tracking it.

 

Since the $1500 you paid in HST was included in the total price you paid of $11500, what you'll need to do is enable a setting that allows you to specify that the amount on the transaction includes tax. Let me show you how:

 

  1. From the Edit menu, choose Preferences.
  2. Select Sales Tax, then go to the Company Preferences tab.
  3. Check off the box for Allow tax inclusive (gross) price and costs to be entered within Display Taxes. 
  4. Hit OK to save your changes. QuickBooks may need to close all open windows to implement this change.
  5. Navigate to the transaction you've entered to represent the purchase of equipment. 
  6. At the top, look for the small checkbox that reads Amts Inc Tax next to the Attach File option. Check it off.
  7. Enter the line item and amount, and select the tax code. QuickBooks will automatically calculate the amount of tax based on the rate you select. This won't change the total amount paid, but will include it in the total amount due or paid. 

 

Since you've selected a sales tax code on the transaction, QuickBooks will account for this amount of tax paid in the appropriate manner. If you want to learn more you can check out our article on How to set up sales tax in QuickBooks Desktop.

 

If this doesn't quite do the trick, it might be helpful to check in with one of our support agents. They'll be able to do a screenshare to see exactly how you're recording the transactions and how the taxes are being calculated in order to determine what's going wrong. Your accountant is another great resource because if the tax needs to be recorded separately they'll be able to tell you how to record the entry. If you're not working with an accountant, check out our Find an accountant page to connect with a QuickBooks-certified ProAdvisor.

 

I wish you all the best! I know you'll have this sorted soon. Take care.

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