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Recording Taxes - Payroll & Tax Returns
olllllllo
Member Posts: 7
How do I categorize the following transaction in Wave for a Single member S-Corp.
- Quarterly Payroll Tax payment to IRS (managed by Wave)
- Quarterly Payroll Tax payment to State (managed by Wave)
- 2019 Tax Returns Payment we owed to IRS
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@olllllllo,
Since Wave is managing payroll, the tax payments related to payroll should go against Payroll Liabilities on the balance sheet. This is because Wave creates a journal entry to record the payroll transaction. Typically you may need to delete the actual disbursement from the checking account because Wave has recorded this as Net pay to employees.
As for the 2019 Tax Payment - What are they related to? If it was paying your personal taxes then Owner Draw. If you are paying a filing fee for the business or your state taxes S Corps such as CA and IL then Tax Expense - Corporate. You may need to create that account on the chart of accounts.