How do I categorize "Tax Collected by eBay"?
okdess
Member Posts: 4
How do I categorize "Tax Collected by eBay"? In other words, in PayPal, eBay Sales include the Total paid by a buyer, which in many cases includes sales tax from buyers in states other than mine, meaning I personally don't have to collect and submit this tax to the IRS, but eBay does (all because of the Marketplace Facilitator laws). So unlike when I collect the tax and then have to pay the IRS, I never actually get that money. But PayPal shows my sale amount as the total paid by the buyer. So if the sale is $100 + $8 tax, right now my PayPal transactions show a sale of $108 (which is recorded in Way and categorized as a "Product Sale", and then the $8 as "Tax Collected by Partner". And as a side-note, the PayPal fees they charge us is also based on that total (which I already know I categorize as "Bank Service Charges"). But the "Tax Collected by Partner" (eBay) doesn't seem to fit as an "expense", or a "Liability" (since I don't get the money).
Can somebody please tell me how to properly handle this in Wave?
Comments
I'd like to know the same thing. Is it just another expense?
Hey there @okdess @Marcos1
If you're collecting a sale on an item you sold over Ebay, you won't be able to split your transaction to an expense account unfortunately. But there is a workaround here. You should be able to create a two new accounts; one is an income account called "Ebay sales tax" and the other is an expense account called the same. You'll want to split the transaction ($100 to your income account then $8 to your Ebay Sales Tax income account). You'll then want to create a journal transaction debiting the Ebay sales tax income account and crediting the Ebay sales tax expense account for $8. This will reduce the $8 in your income account and debit the expense account allowing you to track these expenses better.