Track HST payable

Terry1701
Terry1701 Quicken Windows Subscription Member
in Business and Rental Property Tools (Windows)
Hi,
I am using Quicken Home and Business (Cdn version) and I started consulting this year.
I need to track the HST I am paid by a client so I can remit it back to the government at the end of the year.
Is there a "best way" to do this?
Thanks,
Terry

Best Answer

Answers

  • Tom Young
    Tom Young Quicken Windows Subscription SuperUser ✭✭✭✭✭
    Well, there can be a "best way" and then there can be the statutory "required way."
    Under Generally Accepted Accounting Principles sales taxes aren't "revenue" to you and paying those taxes aren't "expenses."  So in this case the accounting for sales taxes collected has those taxes deposited in a liability account (e.g., Sales Taxes Payable) and the remittance of those taxes to the government serves to reduce this liability. 
    In the US cash basis business are required to report sales taxes as a part of "revenue" on income tax returns and remittance of taxes to the government get reported as a form of expense.  Using this method can affect your taxable income due to timing differences, e.g., not all sales taxes collected in a year actually get remitted in the same year.
    As a practical matter, I'd probably use the GAAP method for my own books an records as it's cleaner from a P&L standpoint and gives you more visibility within your financial statements to your liability for sales taxes to be remitted.  It's easy enough to make the adjustment from GAAP to statutory reporting when it's time to submit your tax return.
  • UKR
    UKR Quicken Windows Subscription SuperUser ✭✭✭✭✭
    Answer ✓
    Using the Canadian version of Quicken for Windows there are several discussions in the Community which hopefully point you in the right direction. Here's two of them:
    In Quicken look for Quicken Help and how to set up Customer Invoices (Accounts Receivables) and the associated Tax account(s).


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