Hey @JamieD - yup thats what i'm trying to do. The Sales Tax info is pulling up only the SALES & PURCHASES info invoices - when click on both SALES & PURCHASES and PAYMENTS & BALANCES OWING. Would be great if you could look at that as for NZ, its a big thing.
Ahh gotcha @owl. Something that we can definitely look into, but for right now our reporting structure isn't going to change anytime soon. I do appreciate the feedback that you've given us here though, and when we do have an idea of when we can make these particular improvements, we will let our users know.
how does your system work when a client only makes a partial payment for the amount owing. Isn't the future reporting incorrect on the sales tax report as it doesn't 'remove' the entire amount that was reported, but unpaid...?
Hey @RitaTullyCPA, thanks for reaching out! The Sales Tax Report will reflect the full amount of sales tax that is on an invoice. If a partial payment is applied to an invoice, the sales tax amount will not change in your report as Wave assumes the remainder if the invoice will be paid.
If the remainder of the invoice is not paid then the amount on the invoice will need to be edited in order to be reflected on your Sales tax report.
You're not catching the difference between paying the full amount of taxes owing to CRA vs reporting the full amount of taxes owing at CRA. If we file the return for the full amount of GST owing, but only pay a part of it, your system doesn't work.
@RitaTullyCPA It sounds like you're generating your Sales Tax Report on an accrual basis rather than a Cash Flow basis. If you generate your Report on a cash basis, the report will only calculate for tax owing for what was paid!
why would I do the sales tax on a cash basis? CRA requires us to use the accrual basis - GST to be remitted/reported based on the invoice date. The total must be reported, but not necessarily paid to CRA.
Hi @RitaTullyCPA . For some further clarification, Wave is designed as a global platform for our customers to use internationally. It isn't designed to meet the needs of any one very specific area, but instead we do try to meet the needs of many.
As you already know, when a report is generated on an accrual basis, the system will record the full sales tax that has been incurred, where as cash basis will record the Sales Tax amount that has been paid (which is useful if you're looking at partial tax payments).
If you want a workaround for this, you can head over to the Account Transactions Report and filter for your Sales Tax account. Here, you can generate the report on either accrual, or cash basis, thus providing you with the numbers that you need for partially paid invoices.
I think you've missed what I am talking about. Not when the taxes are incurred on invoices or purchases.
When the sales tax is reported/filed (not paid) to the government, we would like the entire amount reported (not paid) removed from the GST Payable/receivable accounts and the amount owing put into the AP account. As the bank feed transactions come through (partial payments of the taxes owing), the AP bill is reduced, not the GST Payable/receivable accounts.
Hey there @RitaTullyCPA I think the reason some of our community support members mentioned the taxes that are incurred on invoices or purchases is based off of your first touch regarding the question how does your system work when a client only makes a partial payment for the amount owing
I'll admit we're a bit confused by the second half of the message. So the bank feed imports transactions of partial payments you've made to the government, is that correct? Your bank connection will only import transactions made through your bank, so this sounds like you've made partial payments to the government.
Let's take a look at the account transactions report for my HST account. I created an invoice for $10,000, HST brought it to $11,300. I made an invoice payment for $5,000 only. The General Ledger report shows that, of that $5,000 I am paying the full $1300 for taxes:
When I changed it to cash based, it shows what the partial amount of taxes owing is on a $5000 payment:
So this is what @Chelsea and @alexlewiszarkos were referring to.
This breakdown can be found in your Account Transactions Report (general ledger). You are directed to your general ledger when you select the tax category in your Sales Tax report page of course.
In regards to removing GST accounts payable into Accounts receivable, this is not something that can be done in our reports at this time.
Forgive me if we are still a bit confused. Would love to try and work through this together with a bit more clarification and further breakdowns. Perhaps some examples would help!
I was just visiting to read up on how to process remittances, and noticed the conversation below. @RitaTullyCPA, I believe that you could emulate the effect you want by posting a journal entry debiting the sales tax accounts, and crediting a clearing account (any account would work, in fact), and then creating a bill to the Government with a product that is set up to expense to the clearing account you used in the journal entry. This would, in effect, move the credit balance out of the HST accounts and into the AP, from which you could make periodic payments on the outstanding (reported) balance. The running balance of the HST accounts would then only show the unreported amounts in the current period, while the Government of Canada "Supplier" account would show the past amount due.
I would appreciate suggestions on the following..........
For my last financial year, I correctly identified Sales Tax (HST) paid and collected, so my Sales Tax Account is pretty accurate, however, the remittance I had to make to the Government was $22.25 higher. So my Sales Tax Account currently shows I overpaid last year by $22.25. How do I account for this correctly? If I add a Journal entry to debit the Sales Tax Account, am I going to end up with an unwanted credit elsewhere?
What is the best way to handle the 50% HST rule on meals and entertainment? The full amount of the HST flows into my accounts from my credit card. Could I setup a HST 50% tax rate and utilize that so my Sales Tax Account contains the correct amount? Or is there a better way?
Perhaps I'm demonstrating my lack of accounting knowledge here. I understand the process of entering the Journal Transaction as described above.
Wave currently submits my Payroll taxes to CRA for me on a periodic basis. Awesome.
If I create the above Journal Transaction, is Wave remitting my HST to CRA or does it need to be remitted elsewhere? Do I need to make this payment in a way other than through Wave?
Hey @MartyD
For starters, I'm not an accountant, just a tech support agent, however my guesses here would be:
Wouldn't you just credit the asset ↓ account and debit the liability ↓ ? Crediting the asset account would reduce the asset account from which the overpayment came from. But this should be okay as it will align with your transaction.
The issue with creating a new tax rate is that the automated import can't really be changed. But I' have advised folks to manually divide the sales tax amount in half (or by whatever percentage they can be reimbursed) or, perhaps create a tax which is half of the amount of the HST, then create a journal entry and debit the liability you actually paid, to the newly created liability which is only half the amount?
If so, Wave is handling your remittances for you to the CRA. You shouldn't need to pay them elsewhere. This is only for payroll taxes as Wave does not handle end of year Sales/income taxes. Hopefully I've understood your question though! Don't hesitate to reach out and clarify.
I think the accounting software should be flexible enough and allow crediting or debiting the Sales tax accounts for the refunds/payments of the sales taxes. Currently the process is cumbersome and creates extra work, specially for people who do both run their businesses and do accounting.
I get how to use the sales tax report. HOW do I make an entry to show I paid the tax? I prefer to enter it as a bill for reconciliation purposes and easy tracking. I would prefer not to do a journal entry every time. Charlotte H. wrote a nice article on how to set it up in the chart of accounts and how to read the report. However there is nothing showing how to pay the sales tax to the vendor-State- when the tax is due. OR how to do the Journal entry which would be clunky and time consuming for the various taxes I need to pay often. If I only had to pay once a year no problem, a journal entry would be fine. But I need to pay many tax entities often. Paying them as an Bill would work best for me. HOW do I set this up?
I'm a little confused about how to correctly make a journal entry to capture that I paid my Sales Tax each quarter? Do I create a journal transaction and DEBIT the HST Payments & Refunds to the Government account and then CREDIT the same amount to the HST Collected Liability account?
Just curious if you set you set your tax to be recoverable when you first created it?
Only recoverable tax will appear in your sales tax report. Otherwise you can filter it out by select the account transactions report (general ledger) and select the sales tax account from the accounts drop down.
if you paid the sales tax and the transaction appears in your transactions page as an expense, you should be able to simply categorize that payment as a "sales tax payment to the government". This is a liability account which will reduce the amount paid on your transactions which have a sales tax set to them, decreasing the liability.
My sales tax report total does not agree to the balance sheet final as of the same date. All of the different tax codes are set up as recoverable taxes. What is an easy way to find this discrepancy?
My sales tax report for this quarter includes a payment made to the government, made during this quarter, for the tax owing previous quarter. I understand that I would create a journal transaction to credit that account so that it is not affecting my balance owing for this quarter, however I'm unsure what account to debit to balance the transaction. Do I need to create one? If so, what type of account would it be?
If your tax expense transaction appears in your Wave account you can simply categorize that expense sales tax payment to the government, then select the tax payment which it was associated with. Try this out!
Hi, would anyone have any idea why the ONLY taxes showing up as claimable as credits on my report is for transactions that we paid for via owner's equity? None of the ones paid via company funds are appearing, which is throwing out the balance sheet as it is saying we owe far more HST than what we actually do.
Hey @GregH! Can you let me know if the taxes that you're referring to are marked as recoverable? This would be from within Settings > Sales Taxes, where you can click the edit icon on those taxes. If they're not listed as recoverable, then they would not appear in your reports.
@ConnorM : I thought they were, as they were reporting correctly for purchases made via personal cash, but apparently they were not. Since it wouldn't let me change the tax account I just spent a week deleting all entries in that account, then recreated the tax account and re-entered all my transactions. Pain in the butt, but at least it matches now.
Hi - how do you report on sales tax by account?
Since tax reporting for CRA requires we treat sales on a T4A differently than sales without a T4A, I need to be able to see the the sales tax totals for the accounts I use for non T4A sales but I don't see any way to filter; just the totals.
@adamcdavies If you are trying to track sales tax for different types of income, you might want to try having two different types of taxes for each particular source of income (since there isn't an option to sort the sales tax report by income account, only taxes added to income transaction). I feel like this is the best work around for what you're trying to accomplish, you will want to make sure that both of these taxes are listed as recoverable so they are properly accounted for in Wave.
@JamieD said: @adamcdavies If you are trying to track sales tax for different types of income, you might want to try having two different types of taxes for each particular source of income (since there isn't an option to sort the sales tax report by income account, only taxes added to income transaction). I feel like this is the best work around for what you're trying to accomplish, you will want to make sure that both of these taxes are listed as recoverable so they are properly accounted for in Wave.
Thanks Jamie,
I'll take a look at that but I think the challenge there will be that I won't be able to report on the totals. e.g. If I have GST 1 and GST 2, I won't have a GST total. This might still be faster since I'll only need to add up a couple manually.
Hello! I would appreciate if you could clarify the below:
Thank you in advance.
“(VAT 19%) Payments and refunds to the government” – What is this?
I am posting my VAT submission through a Journal and I got confused with VAT 19% account options.
Wave gives me 3 options to chose:
1. (VAT 19%) Payments and refunds to the government
2. (VAT 19%) Tax collected (Liability)
3. (VAT 19%) Tax paid (Asset)
What is “(VAT 19%) Payments and refunds to the government”? It seems that if I chose that option my posting goes to VAT 19% - the asset account. I do not see “(VAT 19%) Payments and refunds to the government” on my Chart of Accounts. When/how to use each options while posting a Journal?
As a North American resident, I wouldn't want to offer you erroneous advice on your UK tax returns so I will leave that up to some others who might be able to help you or you can check out our Wave pro listings for people in your area who might be able to assist you!
Check out these articles on VAT and setting it up in Wave!
Comments
Hey @JamieD - yup thats what i'm trying to do. The Sales Tax info is pulling up only the SALES & PURCHASES info invoices - when click on both SALES & PURCHASES and PAYMENTS & BALANCES OWING. Would be great if you could look at that as for NZ, its a big thing.
Ahh gotcha @owl. Something that we can definitely look into, but for right now our reporting structure isn't going to change anytime soon. I do appreciate the feedback that you've given us here though, and when we do have an idea of when we can make these particular improvements, we will let our users know.
how does your system work when a client only makes a partial payment for the amount owing. Isn't the future reporting incorrect on the sales tax report as it doesn't 'remove' the entire amount that was reported, but unpaid...?
Hey @RitaTullyCPA, thanks for reaching out! The Sales Tax Report will reflect the full amount of sales tax that is on an invoice. If a partial payment is applied to an invoice, the sales tax amount will not change in your report as Wave assumes the remainder if the invoice will be paid.
If the remainder of the invoice is not paid then the amount on the invoice will need to be edited in order to be reflected on your Sales tax report.
You're not catching the difference between paying the full amount of taxes owing to CRA vs reporting the full amount of taxes owing at CRA. If we file the return for the full amount of GST owing, but only pay a part of it, your system doesn't work.
@RitaTullyCPA It sounds like you're generating your Sales Tax Report on an accrual basis rather than a Cash Flow basis. If you generate your Report on a cash basis, the report will only calculate for tax owing for what was paid!
why would I do the sales tax on a cash basis? CRA requires us to use the accrual basis - GST to be remitted/reported based on the invoice date. The total must be reported, but not necessarily paid to CRA.
Hi @RitaTullyCPA . For some further clarification, Wave is designed as a global platform for our customers to use internationally. It isn't designed to meet the needs of any one very specific area, but instead we do try to meet the needs of many.
As you already know, when a report is generated on an accrual basis, the system will record the full sales tax that has been incurred, where as cash basis will record the Sales Tax amount that has been paid (which is useful if you're looking at partial tax payments).
If you want a workaround for this, you can head over to the Account Transactions Report and filter for your Sales Tax account. Here, you can generate the report on either accrual, or cash basis, thus providing you with the numbers that you need for partially paid invoices.
I think you've missed what I am talking about. Not when the taxes are incurred on invoices or purchases.
When the sales tax is reported/filed (not paid) to the government, we would like the entire amount reported (not paid) removed from the GST Payable/receivable accounts and the amount owing put into the AP account. As the bank feed transactions come through (partial payments of the taxes owing), the AP bill is reduced, not the GST Payable/receivable accounts.
Hey there @RitaTullyCPA I think the reason some of our community support members mentioned the taxes that are incurred on invoices or purchases is based off of your first touch regarding the question how does your system work when a client only makes a partial payment for the amount owing
I'll admit we're a bit confused by the second half of the message. So the bank feed imports transactions of partial payments you've made to the government, is that correct? Your bank connection will only import transactions made through your bank, so this sounds like you've made partial payments to the government.
Let's take a look at the account transactions report for my HST account. I created an invoice for $10,000, HST brought it to $11,300. I made an invoice payment for $5,000 only. The General Ledger report shows that, of that $5,000 I am paying the full $1300 for taxes:
When I changed it to cash based, it shows what the partial amount of taxes owing is on a $5000 payment:
So this is what @Chelsea and @alexlewiszarkos were referring to.
This breakdown can be found in your Account Transactions Report (general ledger). You are directed to your general ledger when you select the tax category in your Sales Tax report page of course.
In regards to removing GST accounts payable into Accounts receivable, this is not something that can be done in our reports at this time.
Forgive me if we are still a bit confused. Would love to try and work through this together with a bit more clarification and further breakdowns. Perhaps some examples would help!
Thanks so much.
I was just visiting to read up on how to process remittances, and noticed the conversation below. @RitaTullyCPA, I believe that you could emulate the effect you want by posting a journal entry debiting the sales tax accounts, and crediting a clearing account (any account would work, in fact), and then creating a bill to the Government with a product that is set up to expense to the clearing account you used in the journal entry. This would, in effect, move the credit balance out of the HST accounts and into the AP, from which you could make periodic payments on the outstanding (reported) balance. The running balance of the HST accounts would then only show the unreported amounts in the current period, while the Government of Canada "Supplier" account would show the past amount due.
I would appreciate suggestions on the following..........
For my last financial year, I correctly identified Sales Tax (HST) paid and collected, so my Sales Tax Account is pretty accurate, however, the remittance I had to make to the Government was $22.25 higher. So my Sales Tax Account currently shows I overpaid last year by $22.25. How do I account for this correctly? If I add a Journal entry to debit the Sales Tax Account, am I going to end up with an unwanted credit elsewhere?
What is the best way to handle the 50% HST rule on meals and entertainment? The full amount of the HST flows into my accounts from my credit card. Could I setup a HST 50% tax rate and utilize that so my Sales Tax Account contains the correct amount? Or is there a better way?
Perhaps I'm demonstrating my lack of accounting knowledge here. I understand the process of entering the Journal Transaction as described above.
Wave currently submits my Payroll taxes to CRA for me on a periodic basis. Awesome.
If I create the above Journal Transaction, is Wave remitting my HST to CRA or does it need to be remitted elsewhere? Do I need to make this payment in a way other than through Wave?
Hey @MartyD
For starters, I'm not an accountant, just a tech support agent, however my guesses here would be:
Correct me if I'm wrong here anyone!
Is this regarding your payroll taxes @MM123
If so, Wave is handling your remittances for you to the CRA. You shouldn't need to pay them elsewhere. This is only for payroll taxes as Wave does not handle end of year Sales/income taxes. Hopefully I've understood your question though! Don't hesitate to reach out and clarify.
I think the accounting software should be flexible enough and allow crediting or debiting the Sales tax accounts for the refunds/payments of the sales taxes. Currently the process is cumbersome and creates extra work, specially for people who do both run their businesses and do accounting.
I get how to use the sales tax report. HOW do I make an entry to show I paid the tax? I prefer to enter it as a bill for reconciliation purposes and easy tracking. I would prefer not to do a journal entry every time. Charlotte H. wrote a nice article on how to set it up in the chart of accounts and how to read the report. However there is nothing showing how to pay the sales tax to the vendor-State- when the tax is due. OR how to do the Journal entry which would be clunky and time consuming for the various taxes I need to pay often. If I only had to pay once a year no problem, a journal entry would be fine. But I need to pay many tax entities often. Paying them as an Bill would work best for me. HOW do I set this up?
why wont the state sales tax that i paid show up under reports for the year?
I'm a little confused about how to correctly make a journal entry to capture that I paid my Sales Tax each quarter? Do I create a journal transaction and DEBIT the HST Payments & Refunds to the Government account and then CREDIT the same amount to the HST Collected Liability account?
Hey @greencloverfarms
Just curious if you set you set your tax to be recoverable when you first created it?
Only recoverable tax will appear in your sales tax report. Otherwise you can filter it out by select the account transactions report (general ledger) and select the sales tax account from the accounts drop down.
@Sonal
if you paid the sales tax and the transaction appears in your transactions page as an expense, you should be able to simply categorize that payment as a "sales tax payment to the government". This is a liability account which will reduce the amount paid on your transactions which have a sales tax set to them, decreasing the liability.
My sales tax report total does not agree to the balance sheet final as of the same date. All of the different tax codes are set up as recoverable taxes. What is an easy way to find this discrepancy?
My sales tax report for this quarter includes a payment made to the government, made during this quarter, for the tax owing previous quarter. I understand that I would create a journal transaction to credit that account so that it is not affecting my balance owing for this quarter, however I'm unsure what account to debit to balance the transaction. Do I need to create one? If so, what type of account would it be?
Hey there @Stan_T
If your tax expense transaction appears in your Wave account you can simply categorize that expense sales tax payment to the government, then select the tax payment which it was associated with. Try this out!
Hi, would anyone have any idea why the ONLY taxes showing up as claimable as credits on my report is for transactions that we paid for via owner's equity? None of the ones paid via company funds are appearing, which is throwing out the balance sheet as it is saying we owe far more HST than what we actually do.
Hey @GregH! Can you let me know if the taxes that you're referring to are marked as recoverable? This would be from within Settings > Sales Taxes, where you can click the edit icon on those taxes. If they're not listed as recoverable, then they would not appear in your reports.
Since it wouldn't let me change the tax account I just spent a week deleting all entries in that account, then recreated the tax account and re-entered all my transactions. Pain in the butt, but at least it matches now.
Hi - how do you report on sales tax by account?
Since tax reporting for CRA requires we treat sales on a T4A differently than sales without a T4A, I need to be able to see the the sales tax totals for the accounts I use for non T4A sales but I don't see any way to filter; just the totals.
@adamcdavies If you are trying to track sales tax for different types of income, you might want to try having two different types of taxes for each particular source of income (since there isn't an option to sort the sales tax report by income account, only taxes added to income transaction). I feel like this is the best work around for what you're trying to accomplish, you will want to make sure that both of these taxes are listed as recoverable so they are properly accounted for in Wave.
Thanks Jamie,
I'll take a look at that but I think the challenge there will be that I won't be able to report on the totals. e.g. If I have GST 1 and GST 2, I won't have a GST total. This might still be faster since I'll only need to add up a couple manually.
Hello! I would appreciate if you could clarify the below:
Thank you in advance.
“(VAT 19%) Payments and refunds to the government” – What is this?
I am posting my VAT submission through a Journal and I got confused with VAT 19% account options.
Wave gives me 3 options to chose:
1. (VAT 19%) Payments and refunds to the government
2. (VAT 19%) Tax collected (Liability)
3. (VAT 19%) Tax paid (Asset)
What is “(VAT 19%) Payments and refunds to the government”? It seems that if I chose that option my posting goes to VAT 19% - the asset account. I do not see “(VAT 19%) Payments and refunds to the government” on my Chart of Accounts. When/how to use each options while posting a Journal?
Hey there @MartaP
As a North American resident, I wouldn't want to offer you erroneous advice on your UK tax returns so I will leave that up to some others who might be able to help you or you can check out our Wave pro listings for people in your area who might be able to assist you!
Check out these articles on VAT and setting it up in Wave!
https://support.waveapps.com/hc/en-us/articles/360026050831--UK-Set-up-Wave-to-track-VAT
https://support.waveapps.com/hc/en-us/articles/360025763412--UK-Prepare-your-VAT-return
https://support.waveapps.com/hc/en-us/articles/360026052751--UK-How-to-track-VAT-on-sales-and-purchases