Company tax

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@Angela_Tjitombo

how do i incorporate company tax into my profit and loss

• Have a before tax total, an expense account for tax and then an after tax total.
• Tax provisioning transfers funds from the expense account to a “Tax provision” liability account. A manual process based on your estimate of income tax for the period.
• When tax is actually paid an allocation to the Tax provision account is made to zero it at the end of that financial year, the balance taken from the tax expense account.

See

What account does corporation tax go under?

I created a new account in chart of accounts called Corporation Tax and set it as a liability so it does not show up under profit and loss for tax purposes as its not an expense. Is this the correct procedure? I was not sure whether I should use the existing account called Tax Payable as that one seems to be calculating the VA and I don’t want to mess up the VAT Return by putting Corporation Tax into Tax payable.

How to account for corporate tax

First, create two accounts in your Chart of Accounts: Income Tax Payable under Liabilities Income Tax Expense under Expenses Then create new journal entry to account for income tax expense, let’s say the income tax is $1,000 Debit $1,000 to Income Tax Expense account Credit $1,000 to Income Tax Payable account This will bring your $1,000 into Profit & Loss Statement. When you pay income tax to tax authority, it’s simple cash payment transactions that will have to be categorized as Inc…

Handing income tax

Just create new expense account in chart of accounts called Income tax expense Then at the end of the year, you would make a journal entry where you credit income tax liability and debit income tax expense.

Tax for for PSI business

I assume you are a sole trader also. The official response by most accountants is personal tax is not a business expense so does not belong in your manager business. The problem with that logic is income tax is a major bill for any profitable business so budgeting for it is imperative, particularly if income is varying. Doing so ensures funds are allocated up to 18 months earlier than just waiting till the tax department sends a bill. A way to do it is modify your chart of account as shown […