Skip to main content
D
DGMD
March 25, 2021
Solved

How do you categorize an estimated tax payment on QB? I know it’s not an expense, what is it?

  • March 25, 2021
  • 2 replies
  • 0 views
Original commenter did not share additional details
Best answer by ShiellaGraceA

I got you cover, @denizgereccimd.

 

I have some information about estimated tax payments. These tax payments are personal, they aren't a business expense. You'll want to consider using the Owner's Draw or the Equity account. I'd still recommend contacting your accountant to make sure your book is accurate.

 

If you haven't set up an account yet, here's how to do it:

 

  1. Go to Accounting, then select Chart of Accounts.
  2. Tap the New button. Choose Equity as your Account Type, pick Estimated Taxes in the Detail Type drop-down.
  3. Enter the account details.
  4. Click Save and Close.

 

With the above steps, you should be able to categorize your estimated tax payments.

 

In case you need help with other tasks in QBO, feel free to click this link here to go to our general topic with articles.

 

Drop a comment below if you still have questions or concerns with tax payments. I'll be around to help. Take care and have a lovely day ahead.

2 replies

S
ShiellaGraceAAnswer
March 26, 2021

I got you cover, @denizgereccimd.

 

I have some information about estimated tax payments. These tax payments are personal, they aren't a business expense. You'll want to consider using the Owner's Draw or the Equity account. I'd still recommend contacting your accountant to make sure your book is accurate.

 

If you haven't set up an account yet, here's how to do it:

 

  1. Go to Accounting, then select Chart of Accounts.
  2. Tap the New button. Choose Equity as your Account Type, pick Estimated Taxes in the Detail Type drop-down.
  3. Enter the account details.
  4. Click Save and Close.

 

With the above steps, you should be able to categorize your estimated tax payments.

 

In case you need help with other tasks in QBO, feel free to click this link here to go to our general topic with articles.

 

Drop a comment below if you still have questions or concerns with tax payments. I'll be around to help. Take care and have a lovely day ahead.

D
DGMDAuthor
March 26, 2021

That was super helpful, resolved thank you. Just so I know where can I track owner’s equity in my QB?

A
AZ13
June 1, 2021

how do I transfer the estimated taxes I paid for 2020  to an expense account.  If I leave them as an equity account it makes my balance sheet incorrect.  

 

Rubielyn_J
Rubielyn_J
June 1, 2021

It's a pleasure to have you here, @AZ13. I can share with you some insights about transferring the estimated taxes to an expense account.

 

To do this, we can create a journal entry. This helps you move money between accounts and force your books to balance in specific ways. That being said, I suggest consulting an accountant and follow their advice to ensure that your book is accurate. 

 

To create a journal entry, here's how:

 

  1. Go to the + New button.
  2. Choose Journal entry.
  3. On the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
  4. On the next line, choose the other account you're moving money to or from. Enter the same amount in the opposite column.
  5. Check the amounts.
  6. Enter information in the memo section.
  7. Click Save and close.

 

For additional reference, feel free to view this article: Create a journal entry in QuickBooks Online.

 

In case you'll want to pay the taxes electronically in the future, you'll have the option to pay directly to eftps.gov or within QuickBooks. For detailed steps, see the Make payments online section through this article: Estimated Taxes.

 

Keep me posted if you need more help with estimated taxes in QuickBooks. I'll be around to help you. Have a nice day.

N
NoviceUser22
July 23, 2023

Can you please help me understand this concept regarding Estimated Taxes paid in prior year? After the end of the year on January 1, I have to balance the balance sheet. As such I understand  I have to zero out the equity accounts. Otherwise the balance sheet is out of balance.

 

So I will do a journal entry. I will deduct or debit the equity account labeled estimated taxes. Where should I credit the same amount. Does this go in to Retain Earnings (equity account) or does it go somewhere else? 

 

If you can please include screenshots of the journal entry with which account to debit and credit, that would be wonderful

 

Terms & ConditionsAccessibility statement