Taxes death

[James Gruetzner]

No doubt this has been answered before, but the google was not my friend in
finding an answer, so I'd appreciate some help or a pointer in the right
direction.

In the business, when I make a sale, I've been splitting things as follows:

  - Assets:Undeposited funds -  The amount of the transaction
  - Income:Sales - the price
  - Liabilities:State sales tax - the tax portion

Obviously (to me), the funds = sales + liability  , BUT I'm beginning to
think that I've been doing it wrong.  Anyway, the undeposited funds get put
into the Checking account, and I set enough aside in Savings to cover the
eventual tax bill.

Anyway, after the end of the year, I write a check to the State:
   checking account:  reduced by XXX
   Liabilities:State sales tax:  reduced by XXX as well

The problem as I see it is that the Expenses:Sales tax  account does not
get affected -- but it should.

My gut feel is that there ought to be some way to reflect that I'm setting
aside $$ in the Savings account to pay the tax piper.   But how do I show
that????

Thanks in advance for the help.

   James