how to setup tax tables

[Doctorcam]

* Brian (b_rose at shaw.ca) wrote:
> Hi,
> Is there docs on setting up the tax tables 
> correctly for small businesses. I am confident I 
> saw it but to no avail, now.  Incidently, my 
> problem is the GST I collect stays in GST instead 
> of GST collected, even though I set the tax tables 
> to use GST collected.
> 
> Chart of tax accounts:
> Taxes ( top level account )
>   - GST
>     * GST collected
>     * GST paid
>   - PST
>     * PST collected
>     * PST paid
> 

I have been putting off complying with a request from Linas to put
this in the Wiki, so here goes a preliminary version:

The best way (from what I can see) to set up those accounts is make
them part of the Liability tree.  Mine looks like this (I don't
collect PST):

Liabilities
   |
    -> GST
        |
         ->GST Paid
         ->GST Payable

GST Paid is for what I pay out for goods and services.  GST Payable is
for what I charge my clients.

I set up two Tax Table entries, one called GST, and the other GST
Paid.  They correspond to the two accounts.

GST Paid and GST Payable are oppositely signed, since the latter is a
true liability, and the former (I am reliably informed) is a "Contra"
account.  This is an appropriate way to show depreciation of an asset,
and is more commonly used that way.

GST, the parent account always tells you exactly what you owe the
Feds.

I think that you should be able to do the same thing with PST.

HTH

Cam


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Cam Ellison  Ph.D.  R.Psych. #01417

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