How to deal with a Sales Tax Agency refund in Quickbooks?


P

pfaccount

My business received a refund check from the state sales tax agency
returning a small portion of the monthly sales tax we pay. The stated
reason was that it represented "an overpyament on [my] account. The
overpayment is a result of payments received that exceed the amount of
tax showing due on your monthly account." Therefore it is a refund of
an overpayment, and not a debit or credit for early payment.

My problem is this - I need to deposit it in the Make Deposits window
of Quickbooks. However, I need to associate an account with this check
in order to do so. But I don't know which account to use, or why. Is
it other income? Do I need to debit my sales tax liability? I honestly
have no clue, and need your expertise.

Thank you for your time.
 
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B

Bluepen

Debit Cash and Credit Sales Tax Liability. Then you need to make a
journal entry to Debit Sales Tax Liability in order to clear it, then
credit Other Income. I assume you do not know the source of the
overpayment, such as the customer, etc. It is not material, I would
think.

You should also know why you got the check... what did you do wrong?
It may just be an annoyance but when you get something like this it is
nice to know why.

Lance
 

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