Keeping track of sales tax when reimbursing items bought by owner's personal account

js_does_taxes

The owner purchases something with a personal credit card for the purpose of the business. Following this, an e-transfer is done from the company bank account to reimburse the owner. How do we track taxes paid by the company?

There's this article, (https://support.waveapps.com/hc/en-us/articles/208622836-Handling-business-expenses-with-a-personal-bank-account ) which is useful, but it skips over what to do for accounting recoverable taxes.

On the business site of the site, where should the recoverable taxes be entered?

1) I can add lines in the journal transaction. but because the two columns need to balance, it forces you to enter the subtotal of the purchase in the expense account, which isn't accurate -- I think the whole amount should be debited from the expense category, not the subtotal, but I could be wrong.

2) I can record the recoverable tax paid on the bank reimbursement transaction (e.g. the e-transfer from the company bank account to the owner), but then the date the tax was paid matches the date of the reimbursement transaction, not the date of purchase -- and it changes the time window in which the transaction shows up in reporting.

AlexL

Hey @js_does_taxes . I have an easier solution for you here:

When you record the business expense in Wave, select “Owner Investment/Drawings” as the payment account. Categorise as the relevant business expense. Include the sales tax here to keep track of the input tax credit.

When the e-transfer is made, categorise the bank imported withdrawal transaction as an “Owner Investment/Drawing.” Do not include the sales tax here.

This should accurately take care of the Sales Tax for you.