Sales Tax Accounts - Product / Service

SortITSortIT Member Posts: 21

Hi all,
Firstly, I have 2 rates of Tax: 13.5 / 20 (And they are named that!)

After paying my monthly Sales Tax to Government (it's paid in one lump, regardless of the amount I received at each rate) I notice, when I go to Accounting => Transactions => Add Expense => Category => "Sales Tax Payment to Government", I notice 'Sales Tax Accounts' - I then have 2 accounts: Product / Service

I do not want 2 options, I simply want one account, maybe named "Tax Payment to Revenue". I honestly don't know if I created these accounts, or how they got there.... but either way I want to delete them and just have one account (Well, one for Tax Payment / one for Tax Refund)

Can anyone assist? I went to Accounting => Chart of Accounts. Under 'Liabilities & Credit Cards' I see 'Sales Tax' heading, but that is just 2 accounts names 13.5 / 23

Comments

  • SortITSortIT Member Posts: 21
  • JordanFromWaveJordanFromWave Administrator Posts: 118 admin

    @SortIT When you create a Sales Tax in Wave, it will immediately create a corresponding account in your chart of accounts for that specific Sales Tax. If you have multiple, then you will have multiple Sales Tax Liability Accounts. This is created to give you detail as to which sales tax has been paid, and which ones are still outstanding.

    Is there a specific reason why you would like to track this in one account? The reason I ask, is that without the multiple sales tax accounts, it is extremely difficult to identify and break out the total cost, in the event that you would like to confirm the Sales Tax Liability total,

  • SortITSortIT Member Posts: 21

    @JordanFromWave - Yes, I agree this makes sense re. the different Sales Tax Accounts.

    I actually have now created 3 Sales Tax Accounts: Labour (13.5) / Sales (23) / Consulting (23)

    This issue I am trying to work around is.... At the end of every month, I will create a Tax report. Wave will give me a total for all of these 3 accounts, which is the total number I pay to my Government. (Wave will also give me a report on Tax i've paid).

    When I file my return to Government, on their side it's a simple:
    "Tax on Sales"
    "Tax on Purchases"

    So, my Government calculate the difference and I either pay the liability, or I am refunded for over-payment.

    Let's just say I pay my Government 100, which is a combination of Sales / Labour / Consulting Tax collected, when I log this Expense within Wave, and I choose "Sales Tax to Government", I then have to choose which Sales Tax account.... this is where I get confused.

    Does this make sense?

    PS. In Transactions => Expenses, how do I change the Sales Tax Accounts names?
    Under Settings => Sales Tax Accounts, I have them called 'Sales' 'Labour' 'Consulting', but under Transactions => Expenses, they are called 'Consulting' 'Product' 'Service' (I'm sure I named them this, but can't remember where)

  • SortITSortIT Member Posts: 21

    I think I may have answered my own question....
    Although I pay 1 lump to my Government, I will see what I owe to the Government when I do a Sales Tax Report.

    So, once I have paid the lump sum to the Government, I break it down in to 3 separate Expenses (Sales / Labour / Consulting), balancing out what I owe in each Sales Tax Category, which will show that I don't owe any Sales Tax after i've submitted the expenses.

    Is this right, or am I way off?

  • JamieDJamieD Administrator Posts: 448 admin

    Hey @SortIT. You are definitely on the right track here. In terms of seeing what the taxes are categorized after making a payment, you can split this transaction so that it's categorized into the 3 separate tax accounts you created; https://support.waveapps.com/hc/en-us/articles/208621536-How-to-split-a-transaction .. Also, you can simply go to the Chart of Accounts section in Wave and edit the accounts that you've created in that section.

  • SortITSortIT Member Posts: 21

    @JamieD - Thanks, this makes perfect sense!

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