Taxes: expense or liability?

[Dave Peticolas]

Wesley writes:
> Hi,
> 
> I've been using GnuCash for my personal finances for just a few months
> now, and have a question about how to handle taxes.
> 
> I initially set up my chart of accounts based on the example in the
> online manual, so the taxes look something like:
> 
> Liabilities
> ----Taxes
> --------Federal
> --------State
> etc.
> 
> Now that I'm looking at year-end reports and net worth, I wonder why
> they aren't treated like an expense?  Example:
> 
> Expenses
> ----Taxes
> --------Federal
> --------State

You're right, if you pay the tax up front, it's an expense and
should be classified as such.

dave