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Categorizing Income Tax Payments That Are Neither Short Term Or Long Term Liabilities

BV00BV00 Member Posts: 13

I have a question regarding how to categorize my income tax payments I make each year in wave, but specifically due to the fact that my income tax gets paid immediately. When my tax professional informs me of my tax owed, it is paid at that very moment. Therefore, my tax payments cannot even be considered a long term or short term liability. How then should I categorize those outgoing government payments (withdrawals from my account) in Wave? Any clarification is appreciated.

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Comments

  • KorinaHuddlestonKorinaHuddleston Member Posts: 1

    Hello BVOO! I would recommend in this case that you categorize these tax payment to Owner's Equity. Ask your Tax professional to verify and let them know that is where you have put these transactions. They may have you separate them out or leave them in that category. Hope this helps!

  • BV00BV00 Member Posts: 13

    Thank you @KorinaHuddleston. That may be a good solution. I'll talk to my tax professional about it.

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