Record a sales tax payment, sales tax refund, or discount on sales tax owed

Record a sales tax payment

Record a sales tax refund

Record a discount on sales tax owed

Record a sales tax payment

  1. Open the Transactions page.
  2. Locate the expense transaction, or add an expense transaction and enter the date, amount, and account.
  3. In the Category field, select Sales Tax Payment To Government. The list of sales taxes set up in your business will then appear; select the one you are paying.
  4. Select Save.

Now your payment is recorded, and included in your Sales Tax Report (only available in the web browser version of Wave).

If you are paying more than one tax, you can split the transaction and select each tax included in the payment. You can only split transactions in the web browser version of Wave.

Record a sales tax refund

  1. Open the Transactions page.
  2. Locate the income transaction, or create an income transaction and enter the date, amount, and account.
  3. In the Category field select Sales Tax Refund From Government, then select the tax you received a refund for from the list.
  4. Select Save.

Record a discount on sales tax owed

The Chart of Accounts page and split transactions feature are only available in the web browser version of Wave.

If your business is allowed to pay less sales tax than you owe (for example, an early payment discount), you still need to record the full amount as paid, since you don't owe that money anymore. You can accomplish this by splitting your payment transaction to record the full payment and the discount.

To set up a sales tax discount account:

  1. On the left navigation menu, click Accounting > Chart of Accounts.
  2. In the top right corner, click Add a New Account.
  3. In the Account Type dropdown, select Discounts, under the Income section.
  4. In the Account name field, enter a name for the account like Sales tax discounts.
  5. Click Save.

To record the sales tax payment and discount:

  1. On the left navigation menu, click Accounting > Transactions.
  2. Locate the payment transaction, click the dropdown arrow to the right and select Edit more details. Or, click Add expense at the top to create a new transaction, then enter the date, account, and amount.
  3. In the transaction details pop-up box, click Split transaction.
  4. On one of the split line items, enter the total amount of the tax due according to the Sales Tax report. Categorize this amount to Sales Tax Payment to Government, and choose the sales tax from the list.
  5. On the other split line item, enter the amount of the discount. In the Category drop-down, select Discounts and Fees, then choose Refund for Sales tax discount (the sales tax discount account you created above).

    Choosing the Discounts and Fees category will change the amount to negative, so the transaction will balance.

  6. Click Save.

 

You’re done. The Sales Tax report shows that the tax is paid in full, and the correct payment amount is recorded in your bank account.