Assigning Expense Accounts to Tax Lines in QuickBooks
When first creating a company with the QuickBooks Easy Step Interview the type of business you select determines the expense accounts available to you. Expense accounts can be used for many purposes related to the business, including travel, seminars, conferences, dues, subscriptions, advertising, promotion, supplies and rent. Corporations and Partnerships are often able to skip adding tax lines since they are assigned automatically for most accounts. Sole Proprietors usually need to select the tax account line manually, based on the advice of their accountant. The tax line is crucial and can save your company time and money when preparing tax returns.
Click "Lists" and "Chart of Accounts" to access, edit or add any expense accounts for your company.
Select the expense account that you want to associate with a tax line. Some expense accounts you may need to use are the Utility, Automobile or Office Supplies accounts. You may also have sub-accounts for each expense account. For example, the Utility account may have sub-accounts for Water, Phone and Power.
Click the "Account" drop-down menu at the bottom of the list. Click "Edit Account."
Click the "Tax" drop-down menu and select the appropriate tax line for the account. Click "OK."
Select "Sch C: Repairs and Maintenance" if you need to select a tax line for a computer repair, auto service or equipment repair expense account. If you can't find an exact match for your expense account, choose the "Sch C: Other Business Expenses" tax line.
Information in this article applies to QuickBooks 2013. It may vary slightly or significantly with other versions or products.