DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

How to record tax prepayments?


#1

My bank has made an error when they set up my account. They forgot to enter my company tax file number, and so now that I have received interest after the account has been open for a month, they have withheld tax from the interest at the top marginal rate which will (has?) be forwarded to the Australian Tax Office.

It is only a small amount, and I will be able to claim it back at the end of the financial year (or offset it against other tax liabilities), but now I need to figure out how to record this transaction in Manager so the bank account can still be reconciled. It isn’t an expense, or a liability - and unfortunately, my Accountant is away on his honeymoon so I dare not ask him!

What would you suggest is the “correct” way to record such a transaction?

Thanks in anticipation.


#2

Create an asset account in your Chart of Accounts and call it Tax credits. Allocate the payment bank account made to ATO on your behalf to this account.