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sales tax paid - cant choose 'sales tax paid 2' anymore


shtewps
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I updated Express Accounts and it seems that I can no longer track the sales tax that I pay on expenses into my "sales tax paid 2" account. In my previous version express accounts would record a running total of the HST I have paid under 'sales tax paid 2' (2 being for the second year in business I guess) and when I run a balance report it would show sales tax paid 2 on the report as well as sales tax collected.

 

Now when I process expense payments it just keeps track of the HST I paid under some random other account and when I go to "options > tax > HST" and then "sales tax paid", I can't select the "sales tax paid 2" account from the list! It only seems to show expense accounts there, but where it says "sales tax collected" I can still choose the "sales tax collected 2" account.

 

What the heck is going on here? I can manually edit the journal entry back to "sales tax paid 2" and it will update the running total but its so unnecessary as it worked fine before.

 

Here are a couple of pics to help describe the situation. PLEASE if you know the solution here, let me know - I would very much appreciate it.

 

1bGxuUG.png

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In the 'tax rate' window above, 'Sales tax collected' pull-down-list contains all the 'Liability' accounts from your charts of accounts, and 'Sales tax paid' pull-down-list contains all the 'Expense' accounts from your charts of accounts. This is expected behavior. Sales tax collected should be a liability account because it's money that is actually owed to the taxing authority and is not money that belongs to the business. Sales tax paid is sort of expense when the business itself purchases something and pays tax on it.

 

You may need to edit your 'chart of accounts' and list sales taxes paid as Expense accounts.

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Thank you so much for the reply here. It's really appreciated. In the older Express Accounts version, both tax collected and tax paid pulldowns showed the same accounts. When I first started using express accounts I guess it automatically created both of these tax accounts as liability accounts and in the recent version they changed sales tax paid to be an expense account instead of a liability account.

 

What I'd like to do is fix the problem at the core. When I run a balance sheet is shows me all of the tax I paid vs. the tax i've collected and shows the difference as a liability which is expected. If I change the sales tax paid account to something other than the 'sales tax paid 2' liability account, it doesnt seem to show up in my balance sheet any more and does not calculate against the sales tax that i've collected.

 

Would you happen to know the best way to take the value of my 'sales tax paid 2' liability account, add that value to a new sales tax paid expense account, and have the new account show up in my balance sheet?

 

Here is a quick glance at my balance sheet. Although both of my tax collected and tax paid accounts are liabilities, it still deducts my tax paid from my tax collected to show the value of what I need to remit.

 

8uwKdPh.png

 

 

 

Again, your help and assistance is extremely appreciated. Thank you very much.

 

 

 

In the 'tax rate' window above, 'Sales tax collected' pull-down-list contains all the 'Liability' accounts from your charts of accounts, and 'Sales tax paid' pull-down-list contains all the 'Expense' accounts from your charts of accounts. This is expected behavior. Sales tax collected should be a liability account because it's money that is actually owed to the taxing authority and is not money that belongs to the business. Sales tax paid is sort of expense when the business itself purchases something and pays tax on it.

 

You may need to edit your 'chart of accounts' and list sales taxes paid as Expense accounts.

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You're welcome. I'm new to Express Accounts, so not sure about how it'd behave when an account is switched from Liability to Expense. But, if you have past entries for 'Sales tax paid 2' as Liability, I recommend do NOT delete or change anything with it. This may corrupt your balance-sheet and statements. Instead, I suggest create a new account, let's say, 'Sales tax paid 2B' as an Expense account in your charts of account, link it to a tax rate in Options, and experiment how it behaves with new transactions, and how it shows up in balance-sheet, journal and income statement. Please let me know how it goes. Thanks.

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Great suggestion there, thanks! I went ahead and created a new expense account to use as the "new" sales tax paid account. I also set it as the default linked account for "sales tax paid". Not too sure if this is necessary or not, but sounded right.

 

XTvKuRJ.png

 

 

Then I went into my tax settings and under HST, set the "sales tax paid" option to the new "sales tax paid 2B" account.

 

89xGd1f.png

 

 

Then I went and created a dummy purchase payment to see if the sales tax paid in the new "sales tax paid 2B" account would be shown on the balance sheet. The bad news is that "sales tax paid 2B" does not show on the balance sheet. It still only lists "sales tax paid 2". The good news is that when I go into the journal, that transaction had allotted the correct tax amount to "sales tax paid 2B". I just have no idea how to get it to show up on the balance sheet.

 

 

idcGPtx.png

 

 

If I run an income statement, "sales tax paid 2B" shows up with an amount of $11.50. However all the other tax paid totals for my "sales tax paid 2" account doesn't show up in the income statement (not too sure if it would though given that it's a liability account).

 

 

A workaround to having the balance sheet continue to maintain my sales tax paid numbers under the "sales tax paid 2" account is so go into the journal and manually edit the accounts for that transaction and choose "sales tax paid 2" for the tax portion. When I do that it adds that tax total to the running total of HST paid and shows up correctly in the balance sheet. But there has to be an explanation to this because NCH changed the ability to use liability accounts for sales tax paid. The older version set up my sales tax paid account as a liability and the new version will only let me choose an expense account now so it stops calculating and I can't seem to find a way to have an new expense account as a 'sales tax paid' account show up in the balance sheet. Ahhh...

 

Again, thank you very much for your insight. Although it's not 100% solved I do feel like we're making some headway here and I'm getting a better understanding of things.

 

Cheers.

 

 

You're welcome. I'm new to Express Accounts, so not sure about how it'd behave when an account is switched from Liability to Expense. But, if you have past entries for 'Sales tax paid 2' as Liability, I recommend do NOT delete or change anything with it. This may corrupt your balance-sheet and statements. Instead, I suggest create a new account, let's say, 'Sales tax paid 2B' as an Expense account in your charts of account, link it to a tax rate in Options, and experiment how it behaves with new transactions, and how it shows up in balance-sheet, journal and income statement. Please let me know how it goes. Thanks.

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Guest N C H_TM

If you want Sales Tax Paid 2 to appear on the Balance Sheet you will need to change this account to a Liability account. In general accounting expense accounts do not appear on the Balance Sheet, but are shown on the Income Statement (P&L). I hope that helps.

 

However, please note, sales tax paid is not really a liability. It is an expense and technically should be treated as such.

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If you want Sales Tax Paid 2 to appear on the Balance Sheet you will need to change this account to a Liability account. In general accounting expense accounts do not appear on the Balance Sheet, but are shown on the Income Statement (P&L). I hope that helps.

However, please note, sales tax paid is not really a liability. It is an expense and technically should be treated as such.

 

If I change "sales tax paid 2B" to a liability account, I am unable to select it within my tax options as the default sales tax paid account. Therefore Express Accounts will no longer calculate my taxes paid under "sales tax paid 2B". I think this is where the bug lies - Regardless of what the proper account type should be or how express accounts handles them, I am unable to select a liability account (like I used to be in the older versions) from the tax options for sales tax paid. Under sales tax collected, you can definitely still choose liability accounts.

 

I think technically the tax you pay should be considered an asset since its an amount of money that you own (as long as your tax collected amount is higher) and will eventually get to keep since only the difference is remitted, but I can see why it would also be considered an expense since it first comes from your pocket as the result of a payment. Either way, it seems impossible to continue to calculate your sales tax paid and have it show up in the balance sheet without manually editing the journal and changing the account back to the original "sales tax paid 2" liability account.

 

After reading through above description, I think, this is a bug in Express Account. Many countries/places do assign 'Sales Tax Paid' to 'Asset' or 'Negative Liability' type. I'm going to file a bug report on NCH website.

 

I think you're absolutely right here. It definitely seems like a bug but it's weird how it hasn't been caught yet. Surely people must be checking their balance sheets on the later versions of this program and noticing that their tax paid isn't being calculated under the liability account that it once was.

 

 

EDIT: Now that you bring up the "negative liability" account type (which to me sounds like an asset), it makes sense that express accounts was using "sales tax paid" as a liability account but making it negative. Not sure what settings make a liability account negative but it seems like express accounts was doing this just fine in its earlier version as my "sales tax paid 2" account always shows on the balance sheet in brackets making it a deductible amount from my sales tax collected amount.

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So I managed to create a new liability account ("sales tax paid 2c") and have it show up on my balance sheet. However the managing of accounts is not automatic and I think this is where the bug lies. I created the new liability account but in my tax option I am still not able to select a liability account under "sales tax paid". I can still only select expense accounts (pointless as they dont show up on the balance sheet and deduct from your HST owing to the gov't).

 

When I go into the journal and manually change the tax paid on a certain transaction to my new "sales tax paid 2c" liability account, it shows up in the balance sheet as it should. This is just to confirm that additional liability accounts will properly show up on the balance sheet. If I am to calculate a proper running total of my tax paid, I will need to manually edit the journal every time if I want those totals to go to a liability account.

 

Can someone from NCH confirm that it is in fact a bug that will not let us choose a liability account from the tax options > sales tax paid?

 

Thank you.

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  • 1 month later...

Awesome! Thanks so much for updating this thread with that info. How is the issue fixed? Can you now choose liability accounts under the "sales tax paid" option or does it just create an account for you and automatically tally the on-going taxes paid like in the earlier releases of this software

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Geez really? Can you post some screen shots?

 

It lets you choose a liability account under the 'sales tax paid' option. Also, it seems they redesigned many things, including main-window layout with colorful buttons. I'm not sure whether I like this new look.

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