How to pay sales tax in Wave
System
Posts: 412 admin
How to pay sales tax in Wave
You've tracked the sales tax you've collected, and now you're ready to pay it. Here's how to enter it in Wave.
Recording a sales tax payment
There are two different ways to record the payment of a ...
0
Comments
So we paid the Provincial Sales Tax amount at the beginning of this year and it apparently must want an opening balance or something as it is using the amount that was paid and doing a running wave balance on that and then on the dashboard it records that the company has an overdue bill. What is going on and how do I fix this?
When the payment was made it was categorized as provincial sales tax payment
Hey @jwatson
I think the best way to categorize this is by just creating an expense transaction in your transactions page rather than making it a bill. This expense paid to the government does not need to be tracked using a bill but instead you can create either a journal transaction debiting the account which the funds were paid from and crediting the sales tax account you created in your Sales Tax setting.
This can also be achieved through a regular expense transaction and that will create your starting balance for your account!
Hi,
We've received sales tax credits from the Government which we can use against sales tax we owe.
What's the best way to account for this in Wave?
How do I avoid the sales tax payment to the government showing up in the sales tax report?
For example I paid my sales tax for 2019 Q4 in January, but now my 2020 Q1 sales tax report is showing the amount paid to the government as a credit. Which doesn't make sense that I can ask the government to pay me back money I paid them? Is the system broken or am I doing something wrong?
I have done both options, same issue.
Hey @Fastore! Thanks for reaching out here. What format had you received these sales tax credits in? Was this just a refund from them? You could use the 'Sales Tax Refund from Government' category, but I'd love to know a little more around your particular situation!
@DMartin Great question here! I'd be really interested to see what this is looking like on your end. Can I get you to post a screenshot here? Feel free to obfuscate any sensitive information
Here are a few of screen shots. Hopefully this is helpful, the report breakdown is showing the government sales tax payment issue I was asking about and also Gas/Fuel receipts that I would like to claim at the end of the year not quarterly.
Hey @ConnorM Wanted to follow up on this. For some reason my thread on this topic is no longer online. But are you able to help me within this thread. I have uploaded some images above. Would love to solve this. Thanks!
Hey @DMartin!
It looks like you've entered these entries via journal entry (just judging by the one you posted above). As a first note, I personally would recommending showing sales tax payments in Wave not by journal entries, but rather, by simply categorizing the expense transaction accordingly.
As for your initial question about not having sales tax payments to the government show up on your Sales Tax report, I'm afraid that isn't really possible. While Reports in Wave are based on the information and transactions that a user inputs, what actually appears on the report is not changeable or editable. In other words, your Sales Tax Report will always show the sales tax payment to the government portion.
As for the credit portion of your initial post, are you referring to the credit entry on the report itself? Or the credit entry on the journal transaction? In any case, I'm worried that this question may go beyond the scope of community. By that I mean two things. The first is that I don't want to have you post any more potentially private information on a public forum. The second, is that it would be super helpful to hop onto your account to take a look.
I really think that Wave was much better in the original form. The upgraded version is a headache - even the most simplest of tasks that could be done with ease previously now knock me out in the new version.
Why do I see 3 categories for each of my sales tax heads - 1. Payment and Refunds to Government, 2. Tax Collected (Liability), 3. Tax Paid (Asset)? My sales tax is paid partly from my checking account and partly from the recoverable input taxes collected under the same head. For Example: If I have collected GST $100 (through Sales) and have paid $30 (recoverable) (through Purchases), ideally in the previous version, I would have made one simple journal entry:
Checking Account (Asset) - $70 (Credit)
GST (Receivable) (Asset) - $30 (Credit)
GST (Payable) (Liability) - $100 (Debit)
Now in the new version, apart from Tax Collected (Liability) and Tax Paid (Asset), I see a new entry Tax payment or refund to Government. What should I do with this 3rd category and how should I make use of it while making my journal entry?
Please help. Btw...Is there any option for individual users to revert to original version if they don't like the new one???
Hey there @SunnyOffice
I'd like to start off by saying that at this point we have completely removed the legacy version of Wave so we cannot revert any users back to that version. I do apologize that you're not satisfied with this update, but check out this post for future updates coming to our TRANSACTIONS PAGE.
When you create a sales tax under Settings > Sales taxes, this creates a liability account for that tax. Our new version allows you to reconcile properly when you make a payment (or receive funds) to/from the government. You simply need to categorize this transaction as a payment or refund from to the government, then select the necessary tax account created by your sales tax liability.
The refund category is for an amount received by the government for a tax return!
Does anybody know how to show a discount on taxes in Wave. For example, if I pay my Texas taxes before the due date, they give you a half percent discount. What kind of journal entry can I enter to balance my Sales Tax account and put that different back in my account?
Sales Tax Report / Account Transaction - very difficult to find the "Total Debit" as the "Tax Payment / Report to Government" is part of the Totals. The Payment to Government (SARS) cannot be part of the "Purchases Subject to Tax"
Why can't the Sales Tax Report just show for the period: Purchases Tax (Debit) and Sales Tax (Credit)
You are more than welcome to look into this matter on my Account. I will create an Accountant Login.
Thank you in advance for the attention.
NB: It does look like this is a Issue as "Only 5 found it helpful"
I am having the same issue.
Finding it very difficult to Understand the Report.
In South Africa (SARS) we insert the Total Sales Amount, SARS will Auto Calculate the 15% VAT.
I have to Export to Excel.csv and deduct the Payment to get the True Amount.
Looks like the "Account = VAT(Tax)" sees "Government TAXes" as a Vendor.
Government duties is an Indirect Operating Costs and NOT a Sales / Purchases cost.
May be adding a Option called "Show Tax Payment in Report" can be an Option to "Checked"
Hey @TODavid69 ! To record a tax discount in Wave, please following the instructions below:
Head over to your Accounting > Chart of Accounts page and then Add a new account.
Create an Income account called Sales Tax Discount Income, or another name that works for you. If you want to create individual discount income accounts per tax, that is totally fine!
Once this is done, you can use a journal transaction on Accounting > Transactions > More > Add journal transaction to record the discount:
Hello @PhillipS ! . Do you mind clarify your inquiry for me along with a use case scenario on how you would improve this and why it’s important to your business? This will give us a better understanding of how you would use the Sales Tax report in Wave.
With our Account Transactions (General Ledger) report, you can select and view the tax account in question to see all of your debit and credits for a specific period that you can adjust. Also, at the bottom of the report you can view your debit and credit totals along with the account balance. This may suffice.
Thank you for the attention.
I have no problem in creating you as a "Accountant / Administrator" in my System.
In South Africa Small Business (SME) is allowed to Submit VAT(15% and 0%) Bi-monthly.
This is to SARS (South Africa Revenue Services)
15% for almost everything and 0% for Fuel, Brown Bread and some Food products.
Mine under discussion (Aug-Sep) using the Custom Date (From-To)
The TAX Sales / Purchase reports the Transactions correctly.
Then:
1) SARS is paid during August for the the Previous Period (Jun-Jul)
2) The Payment (made to Government Tax 15%) is recorded correctly
3) The TAX Report then shows this as a "Purchase" and calculation is Distorted.
I export to Excel and then remove the Entry wasting time.
Improve the Report: Give a "Option Check" to Exclude the Payment
This is a Sale/Purchase TAX Report (for us to Submit VAT to Government)
WAVE can do Another Report on "TAX Payments"
Trust above explains it - it is NOT difficult to simulate this.
Skype / AnyDesk / TeamViewer is also available
I edit / fix the spelling mistakes on my Reply - Now it is completely Gone - Grrr
Thank you, I see it is back :-)
Hey @PhillipS , it seems like your post was marked as spam so it needed to be verified by an admin. Sorry about the confusion!!
To be clear, this isn't something that is supported in Wave (as you already know). Because we're an international accounting software, it can make it difficult to support all regional laws and legislation around the world when it comes to Sales Taxes. Unfortunately, VAT is one of these cases.
It looks like you've laid out your workaround steps above on how you currently handle this type of situation and I just wanted to take a moment to congratulate you on coming up with this on your own.
As this is a feature idea from your side, I'm more than happy to ensure that this is passed along, but in full transparency at the moment this functionality isn't located on our short-term roadmap so I can't commit to if and when it will be implemented.
Again, thanks so much for taking the time to add your input and provide a workaround for other users. It's greatly appreciated.
Thank you for the feedback.
While I do appreciate your reply it is hard to accept the reason.
International and thousands of users means Wave is doing it the correct way.
There are links that raises the concern and in fairness complaining about the Sales Tax Report.
VAT versus GST is just a different method but they are still TAX to Government.
WAVE does not have to tread it different.
Please solve the REPORTing. I think Wave might be 1x Report short.
I just finished me 30 Day Trail on ZOHO Books and the TAX report is acceptable.
Please don't ask me why I just use ZOHO as at this stage I think I will.
I only start looking around after feeling uncomfortable with WAVE (there might be others).
Sage Cloud and QuickBooks Cloud is NOT affordable for my small Business.
I am converting from EXCEL to Cloud so my Accountant can assist me.
Covid-19 changed the way we are doing Business, so far very disruptive but we are adjusting.
Looking forward...
I keep on explaining to other "WAVE" and do accept everyone is not an Accounting person that actually does the Taxes:
AlexL is sharing his experience and doing a good Job by following up / keeping Post Alive.
May be someone with more Accounting / Practical experience should be allocated.
It is not hard to understand.
I do understand that South Africa and Other Countries that uses VAT is not in your Focus but Surely you would like to grow/expand?
Surely Copy Existing Tax Report with slight Modifications can'tbe Too difficult – after all it is just extracting Data.
Just my 2cents
What is the recommended way to record a discount received for paying taxes early so the sales tax report correctly shows a zero balance?
Example, owed $100 in sales tax. But due to paying early, the transaction is only $98. How do you record the $2 discount so the outstanding sales tax is zero?