When you use tax codes, Manager automatically calculates the tax amount based on the tax rate. But when an expense involves partial personal use, you may need to adjust tax accounting, because a portion of the expense is not a legitimate business expense. Therefore, a portion of the tax Manager would normally calculate is not attributable to the business and cannot be used to offset amounts owed to your tax authority, as reported in the Tax payable account.
To properly adjust tax accounting, split a line item partially for personal use into two lines on the payment form. Apportion the
Unit price by the percentage of business versus personal use. Apply the tax code only to the line for the business portion. Post the remainder to Owner's equity or Capital accounts (as a draw), depending on your form of organization. Include the applicable portion of tax paid on the personal-use line, but do not apply a tax code, since tax paid for personal use is not a business expense.