How to record estimated tax payments in quickbooks
Quickbooks can take you to the next level in making, recording and tracking all your business financials. Recording entries is so much easy that with just click of a button you will have everything managed. And more over it provides you with the cloud benefits as well, thus you take your business accounting where ever you go. It not only helps you recording your inventory or tracking your invoices but allows you to manage your taxes as well.
Why it is helpful?
Being the small business owner, it is very crucial to make estimated tax payments, not only it makes your life easier but helps your business feel a lot less pressure. Though there are many ways to record and track your estimated tax payments but here we will go through the process of recording them in Quickbooks.
How to track and record your tax payments?
Follow the steps:
- To record your tax payments, create a new Equity account.
- Click on the chart of accounts tab. You can access the tab by clicking on the CTRL+A button.
- Once you are inside the tab you would need to create a new account. If you cannot locate that already then access it with a keyword shortcut Ctrl+N.
- Assign the account to Equity account from the Types list.
Create Other Expenses account..
If you are not of the view of creating a new equity account then you can simply record your entries in the Other Expenses account. To do that create the account and track your taxes. This kind of account is especially helpful for those running a sole proprietorship firm. Inorder to create an account within your quickbooks company file:
- Click on the settings tab, also known as the Gear Icon. This you can find on the top of the navigation bar within the software.
- From the drop down button that will appear, click on the chart of accounts tab.
- From the window that will appear, hit the new tab and your new account will be created.
- Inorder to assign what type of account it is, click on the other expenses and now your account will be assigned as Other Expense account.
There are several advantages of creating an Equity account over Other Expenses account. These are as follows:
- By maintaining a separate equity account you will be separating your tax payments as well. This way your tax balances will not be appearing on your Company’s P&L account. Thus this helps you show the real profits of your company.
- As you are now managing a separate equity account thus they will now be reflected within your balance sheet. They will be shown as withdrawals and will now give you a clear picture of your money at hand. This way you will help yourself in maintaining easy reports.
Need more help…? Then get in touch with us at our tollfree number @1800-940-7442. Our quickbooks proadvisors from Canada will then get in touch with you and help you resolve your issue.