[GNC] gnucash-user Digest, Vol 213, Issue 45

Eric H. Bowen eric at ehbowen.net
Mon Dec 28 16:21:07 EST 2020


:headdesk: :headdesk: :headdesk:

I already know what the accountant will say; as per IRS regulations the
taxes should be included in the cost to me of the goods (assuming that
they're for business consumption/use and not for resale). What I'm
asking help for is HOW TO MAKE GNUCASH DO THIS if it isn't a simple
line-item purchase, such as the two examples of an out-of-state purchase
with sales tax paid later in a quarterly filing or a vendor bill
including taxable items which will later be covered by a processed payment.

Am I still being unclear?----Eric.

On 12/27/20 11:00 AM, gnucash-user-request at gnucash.org wrote:
> Message: 6
> Date: Sun, 27 Dec 2020 10:14:31 -0600
> From: Les <lelliott5 at gmail.com>
> To: gnucash-user at gnucash.org
> Subject: Re: [GNC] Sales Taxes...
> Message-ID: <d20708c0-6412-9efc-c6f0-ad5e65ff085b at gmail.com>
> Content-Type: text/plain; charset=utf-8; format=flowed
>
> I suggest you involve your accountant on this subject.
>
> On 12/27/20 9:41 AM, Eric H. Bowen via gnucash-user wrote:
>> See, they /shouldn't /be (accounted separately), but in case 2 (taxes 
>> paid separately to state at end of quarter) and case 3 (entered as a 
>> vendor bill) there doesn't appear to be a simple way to redirect the 
>> taxes to the cost of supplies. Unless I'm missing it. 
>> Suggestions?----Eric.
>>
>> On 12/27/2020 6:45 AM, Greg Feneis wrote:
>>> All of these examples appear to be supplies for the business to use 
>>> (vs items purchased for selling). Why would the cost of the taxes 
>>> paid need to be account for separately from the cost of the items?
>>>
>>> Kind regards, Greg Feneis
>>> (Pixel 3)
>>>
>>> On Sat, Dec 26, 2020, 16:52 Eric H. Bowen via gnucash-user 
>>> <gnucash-user at gnucash.org <mailto:gnucash-user at gnucash.org>> wrote:
>>>
>>> ??? Okay. With year-end coming up I'm not looking to make major 
>>> changes in
>>> ??? the past, but I'd like to account for everything properly in the
>>> ??? future.
>>>
>>> ??? Say I purchase $100 in printing supplies (paper, ink, etc.) from a
>>> ??? local
>>> ??? vendor. The IRS wants me to account for taxes in the value of items
>>> ??? purchased. So I add an entry for $108.25 (8.25% local tax), and
>>> ??? the full
>>> ??? value goes into my "Expenses:Business Expenses:Office Supplies"
>>> ??? account.
>>> ??? Fine.
>>>
>>> ??? Now, suppose I purchase that $100 in supplies from an out-of-state
>>> ??? vendor who falls under the threshold for reporting sales taxes to
>>> ??? Texas
>>> ??? (rhyming couplet there?) and so does not charge me sales tax on the
>>> ??? purchase. The law says that I have to pay a sales/use tax on the
>>> ??? purchase anyhow. Fine, I have a liability account set up for "Sales
>>> ??? Taxes Payable" which I normally use for the sales I make to 
>>> customers;
>>> ??? once a quarter I total this up and send a check in to the 
>>> comptroller.
>>> ??? No problem at all to do so with my online purchase, but the $8.25
>>> ??? which
>>> ??? I pay at the end of the quarter doesn't get added to my Office
>>> ??? Supplies
>>> ??? purchase, as it should.
>>>
>>> ??? Finally, suppose I purchase the supplies from a local vendor, who
>>> ??? charges tax, but who grants me a "Net 30" for payment and so it goes
>>> ??? into my Accounts Payable as a bill. If I use the "Sales Tax Payable"
>>> ??? account/tax table for the purchase, my payment for the purchase
>>> ??? goes in
>>> ??? as a payment on the liability, which is wrong. I can use a separate
>>> ??? sales tax table tied to a different account for purchases, in
>>> ??? which case
>>> ??? it will be recorded as "Expenses:Business Expenses:Business
>>> ??? Taxes:Sales
>>> ??? Tax Paid", but ideally the $8.25 should have been added to the
>>> ??? value of
>>> ??? the purchase in "Office Supplies."
>>>
>>> ??? Is there a quick and elegant solution to this issue which I'm
>>> ??? overlooking, but that I could implement for next year?
>>>
>>> ??? --
>>> ??? --------Eric H. Bowen
>>> ??? eric at ehbowen.net <mailto:eric at ehbowen.net>
>>> ??? <mailto:eric at ehbowen.net <mailto:eric at ehbowen.net>>
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