<topic sku="core" tNum="289644" author="sallyh" xmlns="x-schema:hhTopicSchema.xml"><index><title>Associate a tax payment with a year</title><category>tax</category><klink type="prcdr">How do I associate a tax payment with a year?</klink></index>
<content>
<extend>
<tease>Why?</tease>
<reveal>
<p>When you make a tax payment, it is important to associate the payment to the correct tax year. For example, if you make a payment when you file your tax return, you should associate the payment with the prior year so that your tax reports will be correct. Or, if you make estimated payments or a payment when you file for an extension, you should specify the tax year so that you can track how much you have paid for the year.</p>
</reveal>
</extend>
<p>To associate a tax payment with the current year or the previous year:</p>
<ol>
<li>On the <emph>Accounts & Bills</emph> menu, click <emph>Account List</emph>.</li>
<li>Click the name of the account you want to use.</li>
<li>Click the <emph>Withdrawal</emph> tab, or click <emph>New</emph>.</li>
<li>In the <emph>Category</emph> box, select <emph>Taxes : Federal Income Tax</emph>.</li>
<li>Enter the remaining transaction information, and then click <emph>Enter</emph>.</li>
<li>Select the tax year to which the payment applies, and click <emph>OK</emph>.</li>
</ol>
<p>To associate a tax payment with a year other than the current year or the previous year:</p>
<ol>
<li>On the <emph>Accounts & Bills</emph> menu, click <emph>Account List</emph>.</li>
<li>Click the name of the account you want to use.</li>
<li>Click the <emph>Withdrawal</emph> tab, or click <emph>New</emph>.</li>
<li>In the <emph>Category</emph> box, enter a new category such as <emph>Taxes : Federal Income Tax-Other Year</emph>.</li>
<li>Enter the remaining transaction information, and then click <emph>Enter</emph>.</li>
<p>This tax payment will not be associated with a tax year. For example, if you receive a letter from the IRS stating that you owe back taxes from several years ago, associating the payment with a category other than <emph>Taxes : Federal Income Tax</emph> or <emph>Taxes : Federal Income Tax-Previous Year</emph> keeps the payment from showing up on your tax reports as a payment that applies to either tax year. It also keeps it from being exported to a tax software program as a payment for either year.</p>
</ol>
<extend>
<tease>How do I record a tax overpayment that is applied to the next year's tax liability?</tease>
<reveal>
<p>If you apply an overpayment from one tax year to the next, you can enter two transactions to record the tax refund and its application as a payment to the next year.</p>
<ol>
<li>On the <emph>Accounts & Bills</emph> menu, click <emph>Account List</emph>.</li>
<li>Click the name of the account you want to use.</li>
<p>If you are not having any of the overpaid tax refunded to you, open an account such as your checking account.</p>
<li>Click the <emph>Deposit</emph> tab, or click <emph>New</emph>.</li>
<li>Enter the total amount of tax overpaid as a deposit, with the category <emph>Taxes : Federal Income Tax</emph>.</li>
<li>Enter the remaining transaction information, and then click <emph>Enter</emph>.</li>
<li>Click the <emph>Withdrawal</emph> tab, or click <emph>New</emph>.</li>
<li>Enter the amount applied to this tax year, with the category <emph>Taxes : Federal Income Tax</emph>.</li>
<li>Enter the remaining transaction information, and then click <emph>Enter</emph>.</li>
</ol>
<p>If you had some of the overpayment refunded to you, your net deposit should equal the difference between the two transactions. Be sure to use two transactions, not one split transaction. You cannot associate a tax year with a split transaction.</p>
