how to setup tax tables

[David Harrison]

----- Original Message -----
From: Brian <b_rose at shaw.ca>
Date: Monday, September 27, 2004 8:11 am
Subject: how to setup tax tables

> 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

Usually, the PST paid is recorded as part of the underlying expense, as it is not recoverable like GST.  
GST paid offsets GST collected, and you remit the difference.  
For PST, you remit what you collect less commission (assuming you pay on time!).
You want the PST paid recorded on the income statement for income tax purposes, as it is deductable against revenue.

For example, if you bought office supplies of $100.00 plus tax, you would record $7.00 to GST paid, and $107.50 (here in BC) to office expense.

HTH

Dave