[guscusi]

What would the correct Journal Entry be for an Inc. Tax Estimate deposit (Eg. 10,000.00):

Inc. Tax Paid in Advance (D) $10,000 (an Asset account, like pre-paid expenses)
Bank Account (C) $10,000

Any suggestions?

Thank you.

[morgaine300]

Estimated tax payments aren't actually considered prepaid. They have no future use. They might be paid in advance of the tax return due date, but they are within your current accounting year. Just expense them.

Then at year-end, you'll have to accrue the balance not paid. (Taking into consideration all that junk we discussed in the other post.)

[rehmanvohra]

What would the correct Journal Entry be for an Inc. Tax Estimate deposit (Eg. 10,000.00):

Inc. Tax Paid in Advance (D) $10,000 (an Asset account, like pre-paid expenses)
Bank Account (C) $10,000

Any suggestions?

Thank you.

From your post, it appears that:
1. It is an estimate of tax, and;
2. The amount has been paid as a deposit

When such a payment is made it is common that the business is liable to payment of taxes in advance for which an estimate has to be made. The payment of advance tax in India and Pakistan is based on:

1. The tax liability determined in latest completed assessment of tax, or;
2. Estimate prepared by the tax payer

However, in any case, the payment is a prepayment and the entry you have made is correct.

[morgaine300]

This person is in the U.S.

It's not really a "deposit." Individuals are having their taxes deducted as the year goes along. Individuals who earn something that is not having deductions and corporations have to pay it along the way as well, in four installments. It's on current income, so it's not "prepaid" for something that is in a future period.

We normally just expense it. We could conceivably even accrue it on a monthly basis.