Tax deduction at source
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Hi there,
How would I adjust tax deduction at source, deducted by my Customer in my ledger?
For example, I have a customer called ACME Inc.
I've invoiced them $100 and they have paid me $96. The rest of my payment was deducted by ACME Inc. to be paid to the tax man.
Now when I go to record payment, I could logically, mark $96, now I would like the $4 to be added to our Tax Asset against the customer.
Feel free to ask an question, if I'm not clear about my scenario.
Thanks,
Mohsin
2
Comments
I am facing the same problem, myself. The balance shows up as overdue payment on the invoice which makes the dashboard a mess to manage.
Is there a solution?
I think one of them folks in the chat would be able to suggest how you guys can sort this out.
I would be interested to see how we can sort this one out in Wave.
Hi everyone! (pinging @Mohsin @ash @Tungsten_Bond @Muhammad)
There are a few steps involved, but that taxes deducted at source is something that can be accounted for in Wave. Here's how you do it.
Adding a "Taxes deducted at source" payment account
Entering the income for the received payment
Entering the tax deduction as source
I will give this a go.
Cheers, Alexia!
Just to confirm this approach works.
Cheers, Alexia.
Happy to hear that, @Tungsten_Bond!
Hi,
If that is the case for tax deduction when I send the Invoice.
What would be the process for tax deduction when I make payment for the Invoice? Is it to record under liabilities?
Tx
Hey @Metalhead, depending on when you remit taxes, you could assign tax you owe to a Tax Liability account in Wave. This will help you track what is owed as well. The tax payments themselves can be recorded as tax expense transactions.