This article explains how sales tax works in Wave, and how to record sales tax activity.
How is sales tax tracked?
When you create a sales tax, Wave automatically creates a sales tax liability account on your chart of accounts, named after the sales tax. Every time you create a transaction that includes sales tax, the amount of tax is recorded to the sales tax liability account.
If you need to set up multiple sales taxes, be sure to give each sales tax a name that you'll recognize easily.
You can add sales tax to the following transactions:
- Income transactions
- Expense transactions
So how do I deal with sales taxes in Wave?
How to add sales tax to an invoice
How to add sales tax to a bill
How to add sales tax to an income or expense transaction
How to record a sales tax payment
If you are paying more than one tax, you can split the transaction and select each tax included in the payment.
How to record a sales tax refund
How to see your sales tax transactions
The Sales Tax report is a summary of all sales tax transactions, listed by individual sales tax, and organized by tax collected, tax paid, and payments or refunds to and from the government.
The Account Transactions report - which you can link to from the Sales Tax report - shows the beginning balance of the sales tax account, all of the activity in the account, and the ending balance of the account.