Do I need to and where do I record preliminary and income tax paid? This is money paid out but not as an ‘expense’.
I am not sure what you mean by preliminary but income tax paid by a company can be allocated to the Retained Earnings Account. If you enter as the description with the payment “Income Tax Expense” Manager will show it separately in the Statement of Changes in Equity report.
I don’t know which country you are in, led, or how your company is organized. But consider the possibility that income tax paid may not be a valid company expense at all. For example, income of a sole proprietorship in the United States is taxed as income of the owner, not as income of the company. In situations like that, profit or loss of the business is figured without reference to tax. That profit/loss is reported as one element of the owner’s income. Likewise, a partnership passes profits/losses through to the partners and pays no income taxes itself. Only certain types of corporations pay income tax directly as company expenses.