Dear BarsinA! Thank you for your reply. Actually I was asking about the functionality of the Wave software. What the three options[ (1. (VAT 19%) Payments and refunds to the government; 2. (VAT 19%) Tax collected (Liability); 3. (VAT 19%) Tax paid (Asset)] mean and how they affect my postings. I know how to calculate and prepare the VAT submission. I read the articles you suggested but they do not explain why Wave programmers gave us 3 options while posting Journal transactions to the VAT accounts and how they affect/differentiate my postings. I hope you can explain to me what those 3 options were created for. I am asking because after the upgrade I have weird transactions in my accounts and I need to understand them to have my accounts correct. Thanks!
Hi @MartaP , thanks for getting back! To clarify, each of those are different account types. Payments & refunds to the government are expenses. Tax Paid asset would be a category which indicates the amount is owned by the business. A liability account indicates an amount owed to a third party, and so your business is liable to pay it. Once it's paid, it become an expense and your business is no longer liable for it.
If you have lingering questions about the accounting implications of these choices, I would recommend speaking with an accountant. We here on the Community team are not accountants, and I don't want to unintentionally give you wrong advice!
RE:
"It’s important to remember that the Tax amount on sales and the Tax amount on purchases that you see on the Sales & Purchases half of this report often won’t match the debits and credits totals in the account transactions report.
This report shows the net amount of sales and purchases and is intended to be a tool to help you easily complete your tax filing."
I have filed an HST return based on the report and now the government is asking for a full, detailed list of all of the "purchases subject to tax". I only have one HST account and the rest is pretty simple but a long list.
How do I obtain a list of the amounts that this report draws from without using the transactions (since they don't match).
I recently opened a new business so the first quarter's expenses are unusually high so the government wants to see the full list.
Hey @Legacy1 - thanks for reaching out in our Community! To get a full list of your Withdrawal (purchase) transactions with HST applied, your best might be to filter such transactions in the Accounting > Transactions page. If you select the filter option at the top of the page, you can select your HST account as the category, and Withdrawal under the Types dropdown. Here is a screenshot of how you can create this filter for those specific transactions. Hope this helps!
Thanks for your prompt reply but it still doesn't add up.
The HELP section even mentions that the transactions won't always match up with the totals on that report.
So I am looking for a formula or list of which transactions would be included in that total that I copied onto my government remittance form.
Any other ideas?
To clarify, you would still want to get your transactions list from either Accounting > Transactions or Reports > Account Transactions, because although the payment totals might not match, the source of the totals in the Sales Tax report is pulled from the Transactions page, so anything found in any of your reports, is originating in Transactions - so this will be the place to source data for this.
That said, an accountant will be best able to help you with filing concerns. We here in Community are here to help with 'how to do' rather than 'what to do', and must disclaim that we can't and don't offer accounting or tax filing advice. From our role here, the reports pull data from transactions, and so this would be why we recommend using that page as your source of truth. An accountant will be best able to expand on the accounting principles behind the sales tax report if you have remaining questions beyond what our Help Centre article explains. Thanks again for reaching out!
That doesn't help me at all. If it is pulling the information from the Transactions page, it shouldn't be off by such a large amount (almost 15% more).
I have been filing my own HST reports for many years without issue but started using Wave's "report" over the last year not realizing that there was such a difference and no way to break down the exact amount.
I will obviously be calculating my own with a spreadsheet going forward in case I get audited again in the future.
Hi there, I am struggling with the Sales Tax report.
When I generate the report, it is giving me figures for G.S.T on Sales. My business doesn't charge G.S.T, I only claim it. However there is an amount there and when going to the link of "10%" gst, It only shows me the figures for G.S.T receivable not payable. This is throwing out my figures when reporting. I can not find where the figures in the Sales subject to tax are coming from. Appreciate your help. Actually on searching using a process of elimination, it seems if I over-ride the tax receivable amount, it turns this amount into tax owing on sales rather than still GST receivable.
I'm not sure if you have taken a look at our help center article on HOW TO USE THE SALES TAX REPORT however I think this might be a good place to start! Have a look through this and then you should be able to click on your sales tax account which will open up your account transactions (general ledger) report for you to do an audit of your transactions which have this tax associated with it. Let us know if you have additional questions.
This article is not helping me understand why the amount for Sales Subject to Tax in the GST row is not equal to the amount for Sales on my P&L Report. They should be the same numbers. Also, the amount for Tax Amount on Sales is also not equal to the total of what I entered for GST collected in my Sales transactions. Both of these inaccurate numbers are about 20% higher than what they should be. What is going on here? If the first two numbers on this report are not accurate then I feel like I can't trust any of the numbers.
EDIT: changing report type doesn't make a difference and I have GST set as a recoverable tax.
Hey @Ando! Just letting you know that I've replied to another comment you've made regarding this matter. I hope we can follow up there in order to sort through this as best as possible!
I have an interesting situation. I run a Pool Service company. I buy chemicals I use for the pool at wholesale and use them when i service pools. I refuse to invoice the customer for 2 tabs a week, 1.5 lbs of granulated chlorine and 16 ounces of muriatic acid. HOWEVER.... Because I buy them at wholesale with NO TAX being paid, at the end of the quarter, I have to pay taxes on those chemicals. I can go to list of accounts (cash basis) from 7-1-20 to 9-30-20 and it gives me a total, lets say $3500. I then need to pay 8.25% taxes on that which is $288.75. If I apply that payment with my tax received for parts and labor sales, it messes up my Tax Report. Does anybody recommend a work around for this?
Hello, I would like a little help for this rookie!
I had to return to the Goberment 116.76$ on Sales Tax, but because I made an online Payment I got a discount "Less Collection Allowance" of 2.92$, so the final amount I paid was 113.84$. I all ready match the 113.84$ on Transaction with the Bank Import operation (Sales Tax Payment To Goverment/Tax). Now, I know that I have to Add a Journal Transaction for Report de discount of 2.92$ on Wave, and Here is where I need your Help! Can you show me which accounts should I use on Debits and Credits so it show the discount amount on the Tax Report, or at less decrease the Tax amount on he Tax Report please?
Hi @TODavid69 , thanks for your message here! Would you be able to clarify what this tax payment is causing to appear on your tax reports that you believe is incorrect? I'm afraid I can't advise on what your tax payment requirements are, but I can help with confirming whether the reports are at least functioning properly!
Hi @EbertSangrona , thanks for reaching out! It sounds like you need to record a sales tax discount. Here's how!
Make a Sales Tax Discount account
Head to Accounting > Chart of Accounts > Add a new account (top right corner)
Under type, choose 'Other Income'
Under name, type 'Sales Tax Discounts'
Click Save
This account will represent the actual discount the government gives.
Make a JE
Head to Accounting > Transactions > More (top right corner) > Add a journal entry
Under the 'Debit' (lefthand) column, choose '(tax name) Payments and refunds to the government)' as the category
Under the 'Credit' (righthand) column, choose 'Sales Tax Discounts'
Enter the amount of the discount in both columns
Make a note, if you like, about what this transaction is, for future reference
@CallieP Earlier responses in this thread indicated that the journal entry for a sales tax discount like EbertSangrona describes should debit the Sales Tax Payable account and credit your bank account. What is the difference between these two methods?
Wave: "It’s important to remember that the Tax amount on sales and the Tax amount on purchases that you see on the Sales & Purchases half of this report often won’t match the debits and credits totals in the account transactions report.
This report shows the net amount of sales and purchases and is intended to be a tool to help you easily complete your tax filing."
Me: Why don't they match? What is being netted out? I need an answer for the CRA auditor?
@RickWellington In Wave, there are 2 ways to add amounts to the Sales Tax accounts. The first would be through transactions or journal entries that are specifically categorized to the Sales Tax account. These would show up as debits or credits on the Account Transactions Report. The second way is by adding a sales tax to a transaction. In Wave you can do this by entering the transaction, and selecting the "Add a Sales Tax" button. The Sales Tax report will scan for these transactions and include them but will not add the transactions that directly are categorized to the transaction in the first option. I hope that this explains why the two reports may look different!
@MartaP said:
Dear BarsinA! Thank you for your reply. Actually I was asking about the functionality of the Wave software. What the three options[ (1. (VAT 19%) Payments and refunds to the government; 2. (VAT 19%) Tax collected (Liability); 3. (VAT 19%) Tax paid (Asset)] mean and how they affect my postings. I know how to calculate and prepare the VAT submission. I read the articles you suggested but they do not explain why Wave programmers gave us 3 options while posting Journal transactions to the VAT accounts and how they affect/differentiate my postings. I hope you can explain to me what those 3 options were created for. I am asking because after the upgrade I have weird transactions in my accounts and I need to understand them to have my accounts correct. Thanks!
Dear @MartaP -- Did you get to understand this functionality of giving 3 options under sales tax 1. [VAT] Payments and refunds to the government, 2. [VAT] Tax collected (liability), 3. Tax paid (asset)? I am not able to understand how to create a journal for sales tax now and which option to choose when? Besides, I am not able to see any report that gives a breakup of amounts under these 3 options. It appears that these options only appear when I try to enter sales tax from the Transactions page. Earlier it was so damn logical - there was a VAT receivable (under assets) and a VAT payable (under liabilities). If you've figured this out, please help me as well. None of the answers given by the wave team on this subject has helped so far. And the answers they are giving are very vague and general.
I see the transaction in my bank account which includes 5% GST and 7% PST. How do i show on the sale (which inlude both taxs).
For example my sale shows $11.20 so how does Waves automaticaly that transaction included both taxes.
One way is that invoice shows sale $10 and Pst is 7% and Gst is 5% so total sale is $11.20. Where as my transaction when synced with bank account just shows total sale of $11.20 so what is the solution other than manually breaking down the details of that transaction.
Hi @a2zphones , you can add the Sales Tax itself to the transaction in the Transactions page. You'll want to ensure that your Sales Taxes are set up properly under Settings > Sales Tax so that you can add them automatically. Unfortunately Wave won't pick up on which taxes you're paying on which transactions so you do have to add these manually.
I need to calculate sales tax but my sales tax liability is being reduced by sales tax I paid on Expenses (Repairs and Maintenance). I was expecting the sales tax liability to be reduced by sales tax I paid on purchases related to Cost of Goods Sold like Subcontracted Services - things that I am actually reselling. How can I change how the sales tax liability is calculating to ensure it is reduced by the correct expenses (COGS-related)?
@Daniel_Wolfe said:
I need to calculate sales tax but my sales tax liability is being reduced by sales tax I paid on Expenses (Repairs and Maintenance). I was expecting the sales tax liability to be reduced by sales tax I paid on purchases related to Cost of Goods Sold like Subcontracted Services - things that I am actually reselling. How can I change how the sales tax liability is calculating to ensure it is reduced by the correct expenses (COGS-related)?
I am having the SAME Issue.
Did log a call with WAVE but seems to me they don't understand the issue.
Keep on referring us to how it is done.
May be they should make another Report/Option "Not to Add the Tax Payment"
Hello Wave team @AlexL and @Barsin
The sales tax report is very handy. However, I am not able to enter the starting balance (shown as a column of zeros in the article above).
Is is to be added as an expense or a journal transaction or anything else?
If journal transaction, then what is the appropriate category for the expense and income?
Hi Wave team - I'm getting a very strange issue with my sales tax report.
As an example, the Ending Balance for 2019 shows a GST amount of $420.49
The Starting Balance for 2020 shows a GST amount of $177.21
How can the amount owing change between December 31 and January 1?
When I dig into the details for account transactions, I see a 2019 starting balance of $0 and an ending balance of $177.21. So it seems like the 2020 starting is correct but the 2019 ending is wrong.
Depending on which is correct we may have overpaid taxes. Any ideas on how to figure out where the discrepancy is?
Hey @Hisham_A , if you're adding a starting balance, you can check out our Help Center article on how to add these to Wave.
Hi @adamcdavies , this does sound strange. Can you confirm that you don't have any tax payments showing in your transactions page for January 1, of 2020? If something was paid on that date it would make sense that the report balances could change. Let us know!
Hi @AlexL - I double-checked and there are no tax transactions on Jan 1.
With that hint I think I may have found the issue though - still investigating but here's what I notice. I had business use of home transactions split between 2 accounts: business and personal. Each of them also had sales tax associated in order to accurately show per and post tax. I note that Wave no longer allows us to enter sales tax against personal transactions for some reason. I tried removing the sales tax from one of them and both the 2019 closing balance and the 2020 opening balances did change. This is still very strange behaviour but does seem to be at the root of it. My initial guess is somehow the opening and closing balances are using a different filter.
Comments
Dear BarsinA! Thank you for your reply. Actually I was asking about the functionality of the Wave software. What the three options[ (1. (VAT 19%) Payments and refunds to the government; 2. (VAT 19%) Tax collected (Liability); 3. (VAT 19%) Tax paid (Asset)] mean and how they affect my postings. I know how to calculate and prepare the VAT submission. I read the articles you suggested but they do not explain why Wave programmers gave us 3 options while posting Journal transactions to the VAT accounts and how they affect/differentiate my postings. I hope you can explain to me what those 3 options were created for. I am asking because after the upgrade I have weird transactions in my accounts and I need to understand them to have my accounts correct. Thanks!
Hi @MartaP , thanks for getting back! To clarify, each of those are different account types. Payments & refunds to the government are expenses. Tax Paid asset would be a category which indicates the amount is owned by the business. A liability account indicates an amount owed to a third party, and so your business is liable to pay it. Once it's paid, it become an expense and your business is no longer liable for it.
If you have lingering questions about the accounting implications of these choices, I would recommend speaking with an accountant. We here on the Community team are not accountants, and I don't want to unintentionally give you wrong advice!
As for transactions which occurred because of your upgrade, you can learn more about those in this Help Centre article: https://support.waveapps.com/hc/en-us/articles/360035202671-Adjustment-entries-in-your-upgraded-account
RE:
"It’s important to remember that the Tax amount on sales and the Tax amount on purchases that you see on the Sales & Purchases half of this report often won’t match the debits and credits totals in the account transactions report.
This report shows the net amount of sales and purchases and is intended to be a tool to help you easily complete your tax filing."
I have filed an HST return based on the report and now the government is asking for a full, detailed list of all of the "purchases subject to tax". I only have one HST account and the rest is pretty simple but a long list.
How do I obtain a list of the amounts that this report draws from without using the transactions (since they don't match).
I recently opened a new business so the first quarter's expenses are unusually high so the government wants to see the full list.
Hey @Legacy1 - thanks for reaching out in our Community! To get a full list of your Withdrawal (purchase) transactions with HST applied, your best might be to filter such transactions in the Accounting > Transactions page. If you select the filter option at the top of the page, you can select your HST account as the category, and Withdrawal under the Types dropdown. Here is a screenshot of how you can create this filter for those specific transactions. Hope this helps!
Thanks for your prompt reply but it still doesn't add up.
The HELP section even mentions that the transactions won't always match up with the totals on that report.
So I am looking for a formula or list of which transactions would be included in that total that I copied onto my government remittance form.
Any other ideas?
Hey @Legacy1 , thanks for getting back.
To clarify, you would still want to get your transactions list from either Accounting > Transactions or Reports > Account Transactions, because although the payment totals might not match, the source of the totals in the Sales Tax report is pulled from the Transactions page, so anything found in any of your reports, is originating in Transactions - so this will be the place to source data for this.
That said, an accountant will be best able to help you with filing concerns. We here in Community are here to help with 'how to do' rather than 'what to do', and must disclaim that we can't and don't offer accounting or tax filing advice. From our role here, the reports pull data from transactions, and so this would be why we recommend using that page as your source of truth. An accountant will be best able to expand on the accounting principles behind the sales tax report if you have remaining questions beyond what our Help Centre article explains. Thanks again for reaching out!
That doesn't help me at all. If it is pulling the information from the Transactions page, it shouldn't be off by such a large amount (almost 15% more).
I have been filing my own HST reports for many years without issue but started using Wave's "report" over the last year not realizing that there was such a difference and no way to break down the exact amount.
I will obviously be calculating my own with a spreadsheet going forward in case I get audited again in the future.
Hi there, I am struggling with the Sales Tax report.
When I generate the report, it is giving me figures for G.S.T on Sales. My business doesn't charge G.S.T, I only claim it. However there is an amount there and when going to the link of "10%" gst, It only shows me the figures for G.S.T receivable not payable. This is throwing out my figures when reporting. I can not find where the figures in the Sales subject to tax are coming from. Appreciate your help. Actually on searching using a process of elimination, it seems if I over-ride the tax receivable amount, it turns this amount into tax owing on sales rather than still GST receivable.
Hey there @taradavison
I'm not sure if you have taken a look at our help center article on HOW TO USE THE SALES TAX REPORT however I think this might be a good place to start! Have a look through this and then you should be able to click on your sales tax account which will open up your account transactions (general ledger) report for you to do an audit of your transactions which have this tax associated with it. Let us know if you have additional questions.
This article is not helping me understand why the amount for Sales Subject to Tax in the GST row is not equal to the amount for Sales on my P&L Report. They should be the same numbers. Also, the amount for Tax Amount on Sales is also not equal to the total of what I entered for GST collected in my Sales transactions. Both of these inaccurate numbers are about 20% higher than what they should be. What is going on here? If the first two numbers on this report are not accurate then I feel like I can't trust any of the numbers.
EDIT: changing report type doesn't make a difference and I have GST set as a recoverable tax.
Hey @Ando! Just letting you know that I've replied to another comment you've made regarding this matter. I hope we can follow up there in order to sort through this as best as possible!
I have an interesting situation. I run a Pool Service company. I buy chemicals I use for the pool at wholesale and use them when i service pools. I refuse to invoice the customer for 2 tabs a week, 1.5 lbs of granulated chlorine and 16 ounces of muriatic acid. HOWEVER.... Because I buy them at wholesale with NO TAX being paid, at the end of the quarter, I have to pay taxes on those chemicals. I can go to list of accounts (cash basis) from 7-1-20 to 9-30-20 and it gives me a total, lets say $3500. I then need to pay 8.25% taxes on that which is $288.75. If I apply that payment with my tax received for parts and labor sales, it messes up my Tax Report. Does anybody recommend a work around for this?
Hello, I would like a little help for this rookie!
I had to return to the Goberment 116.76$ on Sales Tax, but because I made an online Payment I got a discount "Less Collection Allowance" of 2.92$, so the final amount I paid was 113.84$. I all ready match the 113.84$ on Transaction with the Bank Import operation (Sales Tax Payment To Goverment/Tax). Now, I know that I have to Add a Journal Transaction for Report de discount of 2.92$ on Wave, and Here is where I need your Help! Can you show me which accounts should I use on Debits and Credits so it show the discount amount on the Tax Report, or at less decrease the Tax amount on he Tax Report please?
Hi @TODavid69 , thanks for your message here! Would you be able to clarify what this tax payment is causing to appear on your tax reports that you believe is incorrect? I'm afraid I can't advise on what your tax payment requirements are, but I can help with confirming whether the reports are at least functioning properly!
Hi @EbertSangrona , thanks for reaching out! It sounds like you need to record a sales tax discount. Here's how!
Make a Sales Tax Discount account
Make a JE
@CallieP Earlier responses in this thread indicated that the journal entry for a sales tax discount like EbertSangrona describes should debit the Sales Tax Payable account and credit your bank account. What is the difference between these two methods?
Wave: "It’s important to remember that the Tax amount on sales and the Tax amount on purchases that you see on the Sales & Purchases half of this report often won’t match the debits and credits totals in the account transactions report.
This report shows the net amount of sales and purchases and is intended to be a tool to help you easily complete your tax filing."
Me: Why don't they match? What is being netted out? I need an answer for the CRA auditor?
@RickWellington In Wave, there are 2 ways to add amounts to the Sales Tax accounts. The first would be through transactions or journal entries that are specifically categorized to the Sales Tax account. These would show up as debits or credits on the Account Transactions Report. The second way is by adding a sales tax to a transaction. In Wave you can do this by entering the transaction, and selecting the "Add a Sales Tax" button. The Sales Tax report will scan for these transactions and include them but will not add the transactions that directly are categorized to the transaction in the first option. I hope that this explains why the two reports may look different!
Ty Very Much @CallieP
Dear @MartaP -- Did you get to understand this functionality of giving 3 options under sales tax 1. [VAT] Payments and refunds to the government, 2. [VAT] Tax collected (liability), 3. Tax paid (asset)? I am not able to understand how to create a journal for sales tax now and which option to choose when? Besides, I am not able to see any report that gives a breakup of amounts under these 3 options. It appears that these options only appear when I try to enter sales tax from the Transactions page. Earlier it was so damn logical - there was a VAT receivable (under assets) and a VAT payable (under liabilities). If you've figured this out, please help me as well. None of the answers given by the wave team on this subject has helped so far. And the answers they are giving are very vague and general.
Thanks in advance
Sunny
Hey there @SunnyOffice
Have you had a chance to check out these articles on setting up your VAT return and tracking it in Wave? Hope these help you!
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
I see the transaction in my bank account which includes 5% GST and 7% PST. How do i show on the sale (which inlude both taxs).
For example my sale shows $11.20 so how does Waves automaticaly that transaction included both taxes.
One way is that invoice shows sale $10 and Pst is 7% and Gst is 5% so total sale is $11.20. Where as my transaction when synced with bank account just shows total sale of $11.20 so what is the solution other than manually breaking down the details of that transaction.
Hi @a2zphones , you can add the Sales Tax itself to the transaction in the Transactions page. You'll want to ensure that your Sales Taxes are set up properly under Settings > Sales Tax so that you can add them automatically. Unfortunately Wave won't pick up on which taxes you're paying on which transactions so you do have to add these manually.
I need to calculate sales tax but my sales tax liability is being reduced by sales tax I paid on Expenses (Repairs and Maintenance). I was expecting the sales tax liability to be reduced by sales tax I paid on purchases related to Cost of Goods Sold like Subcontracted Services - things that I am actually reselling. How can I change how the sales tax liability is calculating to ensure it is reduced by the correct expenses (COGS-related)?
I am having the SAME Issue.
Did log a call with WAVE but seems to me they don't understand the issue.
Keep on referring us to how it is done.
May be they should make another Report/Option "Not to Add the Tax Payment"
Hey @Daniel_Wolfe & @PhillipS , I answered this question in the following thread. Check it out if you haven't already seen it: https://community.waveapps.com/discussion/comment/40347#Comment_40347
Hello Wave team @AlexL and @Barsin
The sales tax report is very handy. However, I am not able to enter the starting balance (shown as a column of zeros in the article above).
Is is to be added as an expense or a journal transaction or anything else?
If journal transaction, then what is the appropriate category for the expense and income?
Thanks.
Hi Wave team - I'm getting a very strange issue with my sales tax report.
As an example, the Ending Balance for 2019 shows a GST amount of $420.49
The Starting Balance for 2020 shows a GST amount of $177.21
How can the amount owing change between December 31 and January 1?
When I dig into the details for account transactions, I see a 2019 starting balance of $0 and an ending balance of $177.21. So it seems like the 2020 starting is correct but the 2019 ending is wrong.
Depending on which is correct we may have overpaid taxes. Any ideas on how to figure out where the discrepancy is?
Hey @Hisham_A , if you're adding a starting balance, you can check out our Help Center article on how to add these to Wave.
Hi @adamcdavies , this does sound strange. Can you confirm that you don't have any tax payments showing in your transactions page for January 1, of 2020? If something was paid on that date it would make sense that the report balances could change. Let us know!
Hi @AlexL
Thank you for the response, but I am afraid it didn't help. I entered the starting balance for the HST account as here:
But when I run the sales tax report it does not reflect as a starting balance:
I appreciate your guidance Specific to the sales tax please.
Thanks.
Hi @AlexL - I double-checked and there are no tax transactions on Jan 1.
With that hint I think I may have found the issue though - still investigating but here's what I notice. I had business use of home transactions split between 2 accounts: business and personal. Each of them also had sales tax associated in order to accurately show per and post tax. I note that Wave no longer allows us to enter sales tax against personal transactions for some reason. I tried removing the sales tax from one of them and both the 2019 closing balance and the 2020 opening balances did change. This is still very strange behaviour but does seem to be at the root of it. My initial guess is somehow the opening and closing balances are using a different filter.
I'll keep digging. Thanks.