I suggest you involve your accountant on this subject.
On 12/27/20 9:41 AM, Eric H. Bowen via gnucash-user wrote:
See, they /shouldn't /be (accounted separately), but in case 2 (taxes
paid separately to state at end of quarter) and case 3 (entered as a
vendor bill) there doesn't appear to be a simple way to redirect the
taxes to the cost of supplies. Unless I'm missing it.
Suggestions?----Eric.
On 12/27/2020 6:45 AM, Greg Feneis wrote:
All of these examples appear to be supplies for the business to use
(vs items purchased for selling). Why would the cost of the taxes
paid need to be account for separately from the cost of the items?
Kind regards, Greg Feneis
(Pixel 3)
On Sat, Dec 26, 2020, 16:52 Eric H. Bowen via gnucash-user
<gnucash-user@gnucash.org <mailto:gnucash-user@gnucash.org>> wrote:
Okay. With year-end coming up I'm not looking to make major
changes in
the past, but I'd like to account for everything properly in the
future.
Say I purchase $100 in printing supplies (paper, ink, etc.) from a
local
vendor. The IRS wants me to account for taxes in the value of items
purchased. So I add an entry for $108.25 (8.25% local tax), and
the full
value goes into my "Expenses:Business Expenses:Office Supplies"
account.
Fine.
Now, suppose I purchase that $100 in supplies from an out-of-state
vendor who falls under the threshold for reporting sales taxes to
Texas
(rhyming couplet there?) and so does not charge me sales tax on the
purchase. The law says that I have to pay a sales/use tax on the
purchase anyhow. Fine, I have a liability account set up for "Sales
Taxes Payable" which I normally use for the sales I make to
customers;
once a quarter I total this up and send a check in to the
comptroller.
No problem at all to do so with my online purchase, but the $8.25
which
I pay at the end of the quarter doesn't get added to my Office
Supplies
purchase, as it should.
Finally, suppose I purchase the supplies from a local vendor, who
charges tax, but who grants me a "Net 30" for payment and so it goes
into my Accounts Payable as a bill. If I use the "Sales Tax Payable"
account/tax table for the purchase, my payment for the purchase
goes in
as a payment on the liability, which is wrong. I can use a separate
sales tax table tied to a different account for purchases, in
which case
it will be recorded as "Expenses:Business Expenses:Business
Taxes:Sales
Tax Paid", but ideally the $8.25 should have been added to the
value of
the purchase in "Office Supplies."
Is there a quick and elegant solution to this issue which I'm
overlooking, but that I could implement for next year?
--
--------Eric H. Bowen
e...@ehbowen.net <mailto:e...@ehbowen.net>
<mailto:e...@ehbowen.net <mailto:e...@ehbowen.net>>
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