I have got a statement from the tax department and on it there is an "Interest for early payment" credit. How do I enter this to reflect only on my inc tax owed account?

You'll want to enter the interest for an early payment in QuickBooks Online (QBO) so it'll be in your account. We'll outline the entire process to ensure your inquiry gets addressed.

Before anything else, it's essential to create an account in your COA specifically for the interest that you received for an early payment. These are the steps:

1. On the top right corner, click the Gear icon and select Chart of accounts.
2. Select New and enter an Account name.
3. Choose an Account type, then select the Detail type from the dropdown. Find out more about account and detail types.
4. (Optional) Add a Description to add extra information about this account.
5. Click the Save button.

For visual reference, see the image below.


 

After creating the account where you'll allocate the interest you've received for an early payment, you can proceed to record the credit in the program. Refer to this article for more details: Record and make bank deposits in QuickBooks Online.

Once done, proceed to enter the tax payment in QuickBooks. Here's an article to guide you further: Recording a GST payment (BAS Payment) in QuickBooks Online.

If you're unsure which accounts to use when recording, you can work with an accountant. They can assist you in completing this task and ensure everything is accurate. If you don't have an accountant, I can help you find one. Feel free to visit this page: Find a QuickBooks ProAdvisor.

You can also run a profit and loss report to ensure it's accounted for accurately under income and check your balance sheet to verify if the payment appears on point.

The Community space is available around the clock to address your questions. Feel free to use the comment section below so we can respond quickly to help resolve any issues.