Bookkeeping Company Houston Where the tax sits
The sales tax from last month is still inside income, and you need to know where it should sit. Money collected for the state waits as a liability until the filing is paid. It is not profit.
The liability, not the income
When you collect tax, you are holding someone else's money. The books should show that holding. If the software dumps it into income, the month lies, and the later payment looks like a loss you did not earn.
We check the row against the address. For Harris County the state portion is 6.25 percent, then the city portion is 1 percent, then transit is 1 percent. Fort Bend can differ. The Comptroller lookup is the source, not a memory of a rate from a different year.
After the filing
When the filing is paid, the liability goes down and the cash goes down. Profit should not move just because you remitted. If profit moves, the mapping is wrong and we fix the mapping, not the story.
Ship channel traffic does not pause for a filing calendar. Every Texan who watches that water knows the boats keep coming. The tax on those jobs still has to sit in the month the invoice was issued.
What we need from the file
We need the invoices, the filing, and the address. We do not need a speech about the industry. If the software has a tax center, we read that too, and we still tie it to the liability account.
This page covers the books and the return only. A signed opinion on the statements stays on the disclosures page, where that limit is written once.
Some files show the tax inside a sales account because that is how the software was set up on day one. We do not leave it there to be polite. Moving it to a liability changes the profit number, and we show you the before and the after in words so the change is not a surprise at filing time.
If you remit on a different calendar than you invoice, both dates matter. The invoice month holds the liability. The payment month reduces cash and the liability together. Mixing those two months is how a good quarter looks like a loss.
Ask where yours sits.
Say which month it is and whether the tax is still inside income.
You will be talking to the Steven Palmieri practice.