Quicken & Other Budget/Accounting Software/Tax



What is the entries to record Withholding Tax?

Withholding Tax is under which account type? Is it expenses?


Withholding tax is a cost to the person/company you wrote the payment to
not to your company.  Your company takes this money "in trust" until you make the payment to the taxing authority.  This is a liability to the Company at the time of

So if you owe another entity/person $500 and take $100 in withholding taxes. Your
expense is $500, you post the $100 as a liability and the net check is $400.

In QuickBooks, if a bill is entered, you could record the bill as $400
Allocating the amount as follows
Expense $500
Withholding tax liability  -100

The same thing could be entered on a check if no bill is generated.

Hope this helps,

Linda Saltz, CPA
Advanced Certified QuickBooks Advisor
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Linda Saltz, CPA, QBalance.com


QuickBooks best practices, troubleshooting, accounting, tax We have over 70 pages of website content about QuickBooks tips, running a business, tax and business startup at http://www.qbalance.com


Accountant and CPA over 20 years. Specializing in accounting software for over 12 years, Certified QuickBooks Pro Advisor, QuickBooks seminar instructor since 1997.
Producer of www.QBalance.com over 100 pages devoted to QuickBooks help and support and training for small business owners in tax and accounting issues.

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