Once when you have done this JE booking, you will never try to get tax stastistics for that period again, so I guess it shouldn't be a problem. Doing so anyhow will create a wrong tax report.
The next time you create a tax report, you will select the period past the transaction date for the JE, so it should show correct values.

This should work correctly, but the date of entrance of the JE is very important. (it should be the last day in the period you have run the tax report.
First the tax report, then the JE on the last day of tax period. Now we are cleared to book the accrued tax account and the bank account when we pay the tax.

/Joe

This bit on the Wiki makes sense and is how it should be done.

7. So per 01/31/2010 we would enter a JE where we empty the Tax Accounts and counter book them on the Accrued Tax Account.
8. Now, when you pay the Tax via Bank Payment, you debit this Accrued Tax Account and your bank account is credited.

However, the system seems to get out of step as if you raise a journal entry against the tax accounts as it adds a tax transaction for the journal in the back end. If there is a journal, it is either a clearing entry as described above or it is to fix an error.

After my reconciliation, I think journal entries against the tax accounts should be exempted from reporting on the tax report or there is a flag provided to enable this. I should be able to do my final tax check after the balance is sitting in the Accrued tax Account and there is no balances in the tax accounts and this amount should agree with the tax report. Then I know I have done the complete job correctly.

If it is an error, (eg. may be I posted a sale as tax exempt when it was taxable and I am obligated to remit a portion of my sales), I would be manually recording details on the reports to demonstrate why the error needed to be corrected to support the journal entry. This scenario may mean there is a case to add an entry to the tax report if one side of the JE is against a sales account, but that may be a bit more complicated to implement.

If there is such a feature to enable excluding JE's from tax reports , please let me know as it would make life easier for me.

Rod

As describes here:  under Using the Taxsystem.

You should create an  Accrued Account for Tax collection. Everytime you later run the Tax Report, you should make a journal entry where you empty the balances from sales/purchase tax and move this balance into the Accrued Account for Tax collection.
When you pay your tax to the government, you debit this account and credit your bank account.

So if you have an opening balance of 123,558.00 you should put this amount in the created Accrued Account for Tax Collection.

You were almost right in your suggestion . And you can call it Net Tax Payable (but if the purchase tax is more than the sales tax, you will get a refund from the government).

/Joe

How do I handle this.

I want to load the opening balance as Tax Payable of 123,558.00

Should I just make a debit entry to 'Net Tax Payable' account ?

Thanks

Hi Avb3,

Thanks for the reply but while defining TAX we do not define Net Tax Payable account.
Could you please help to understand ?

Thanks

Chaitanya:

Joe is right, read the wiki first.

Try this link:

https://frontaccounting.com/fawiki/index.php?n=Main.TaxSystem

It should explain it for you, unless you have a situation that is completely different.

Have you read the articles in the FA Wiki about how to handle the tax payments?

/Joe

Thanks for the reply but while defining TAX we do not define Net Tax Payable account.
Could you please help to understand ?

Thanks

Entry would be CR Bank
and DR Net Tax Payable

In tax inquiry one get details for Net payable tax.
When the tax is paid to the authority, how should that payment entry be done.

Type of entry and ledgers to be selected.

Thanks,