QB Issue Resolution:
Answer 1: If the customer is paying the fee, yes it is taxable income
You’ll have to create an income account and a service item for your convenience fee. Then, add it as a new line item to your transaction to make it taxable. Let me walk you through how.
- Click Accounting, then Chart of Accounts.
- Click New. Then, choose “Income” under Account Type.
- Choose “Service/Fee Income” under Detail Type. Then, enter a Name.
- Click Save and Close.
After that, create a service item following these steps.
- Click Gear. Click Products and Services.
- Click New, then click Service.
- Enter the product/service information and choose the Income Account you created.
- Click Save and close.
Once done, add the service item as a new line item to your transaction.
- In your invoice, click the convenience fee item.
- Enter the Amount, and make sure to mark the Tax column.
- Click Save and close.
I’ve attached some screenshots for you.
You can read these articles for more information about:
- Choose where to record payments and processing fees for QuickBooks Payments.
- A quick guide to Credit Card processing.
For your future reference about adding and matching downloaded transactions, please check this article: Assign, categorize, edit, and add your downloaded banking transactions.
The Community is always here if you have other concerns. Please don’t hesitate to reach out.
Resolution for Issue 'Are convenience fees taxable?' available: Yes (Solved).
Source: Intuit Community forum.
Are convenience fees taxable?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.Support for convenience fees
Quickbooks Repair Pro will resolve it efficiently and affordably. Guaranteed resolution of your issue, or you pay nothing!
Error Recovery for convenience fees [Canada]
E-Tech is the #1 Quickbooks data migration and Conversion service provider.
Additional Support Options: