Possible Bug - Sales Tax Behavior on Expense to Asset
amattas
Member Posts: 5
I'm trying to record an expense where I purchased an Asset, and I paid sales tax on the item.
When I set the expense account to the Asset, sales tax improperly shows as Sales Tax due versus Sales Tax Paid.
Has anyone else seen this?
0
Comments
@amattas,
Not sure how you are doing that within Wave but, when you purchase a fixed asset and have paid sales tax, the sales tax is part of the asset, not an expense. The entire amount paid should be categorized as an asset and not bifurcated.
@amattas,
That would be correct. The payment already reflects sales tax. I'm not as familiar with the receipts app since I find it easier just to account for amounts going through the bank rather than having clients matching disbursements to receipts.
Sorry, I meant should I only be using that checkbox on payments from my clients that include sales tax that isn't reflected on an invoice?
Yes, but you should be determining at an invoice level as to whether sales tax applies. If it does, then include on invoice. If not, you would not check the box. You are acting as an agent for the state to collect sales tax from your customer on a taxable sale and then remitting that amount to the state.
And then for expenses, you just include the sales tax as part of the applicable expense account then? i.e. it all goes to Office Supplies?
That is correct.
Thanks, now I have a bunch of data to fix. oi.