Balancing off tax liabilities

I have set tax code for VAT. Used same on sale invoice and in my tax summary report it shows outstanding as liabilities.
Now i have paid the tax. I need to set it off in my balance. Using spend money i posted entry and assigned tax liabilities. But it is not reflecting in tax summary. Help pls

The Spend Money is posted directly to the BS Liability Tax Payable account, the tax field is not used.

The Tax Summary only reflects transactions that have used the tax field.

Thanks Brucanna. But how to post tax paid?. Raise a purchase invoice?

How to show tax as PAID. Help pls

Cash Accounts tab, Spend Money and for the Account select the BS Liability Tax Payable account

Dear @Brucanna,
I did that way only.
Spend > Checking Account> Selected ‘Tax Liabilities’. Posted the amount.
But it is not getting reflected in 'Tax Paid '.

Tax Paid where ?

No Tax Paid account is involved, even if you created one. If you entered the payment as @Brucanna described, it will reduce the balance of Tax Payable.

Hi @Tut,
That’s exactly what I want. But i tried as @Brucanna explained. Then took tax report. Tax paid is zero and previous tax balance was still outstanding. What could I be doing wrong?

Under accounts selected ‘tax liabilities’. Anything else to be done that that.

You have referred to an account Tax Liabilities. Unless you changed its name, you should be using Tax Payable. If you created a Tax Liabilities account, it would not normally be linked to these processes.

Thanks @Brucanna. Missed this post.
This is exactly what i did. Let me recheck and will get back.

Hi @Tut
It is same. Miss spelled. Will check again and see if getting reflected as TAX PAID in reports.

As mentioned earlier - the Tax Summary Report only reflects transactions that have used the tax field

The Spend Money is posted directly an account and doesn’t use the tax field so wont be in reports


Actually, line items on payment forms can include tax codes. See screen shot below. The difference from sales receipts is that all line items on payment forms are tax-inclusive and cannot (currently) be changed. Hopefully, that modification will arrive shortly.

In relation to this topic "The Spend Money is posted directly (to the tax payable) account and doesn’t use the tax field so wont be in reports

Dear @Brucanna and @Tut,
I have seen some screenshots in this forum where amount is shown under ‘tax paid’ in tax summary.

Spending directly from checking account using BS tax payable wasn’t doing that. (Will check again today)

I need it to set it off against each other.

Will update after next try.

Doubt that, as the program is not designed that way.

The Tax Paid on the Tax Summary Report only relates to the “tax paid” to suppliers, it does NOT relate to payments made to authorities.

Why ?

I’m not great at this either, and I hope I understand your point of confusion. It sounds like you are expecting the money you paid to the government to show up in your tax summary
The tax summary shows what you charged customers, less what you paid out on purchases, equals what you owe the government. What you owe the government becomes your total tax liability. It is like an amount that is being held there until you pay the government the resulting sum. But keep in mind that the sum that is being held, has already been accounted for when you made purchases and/or charged customers. It doesn’t have to be restated anywhere as an expense or other. When you make your payment to the government, It just reduces what you owe to the government ( tax liability). Your liability account will go up and down all the time, but is already reflecting everything you charged customers plus what you paid out in purchases. It is the result of those things. That’s why you only post to your liability account, and don’t expect to see that payment result it anywhere other than the cash account you paid from.
When you pay the government, it simply reduces what you owe them, while reducing your bank balance at the same time. That is all. You do not have to restate it anywhere else other than your tax liability account. Done!
I hope I understood and addressed the puzzle OK for you. And I hope, that I didn’t insult your intelligence by explaining it this way. I’m still learning too!

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No insult taken. Accounting is alien for me.

Yes, i totally understood you. Thank you