Income Tax Postings for EOY

Overview

You shold contact your accountant on how to handle your Company EOY Income Tax and EOY processers.

Readysell cannot advise you on how to do so.

One possible procedure is shown below:

Post tax expense into the previous year by inserting a Manual General Ledger Journal with the full amount to be paid.

Debit Income Tax Expense with the full amount to be paid
Credit Income Tax Payable Liability with the full amount to be paid.
See link on how to insert a manual general ledger journal Entering a New General Journal

Payment option one, process income tax payments as bank payments:

Insert a bank payment from the correct bank account, with the correct tender, description and payment reference,date and dissect it against the Income Tax Liability Account
This will Debit the Liability account and Credit the Bank Account
See link Entering a Manual Bank Payment

Payment option two, process income tax payments and track through Suppliers Card after the Journal has been entered

Set up a card called something like ATO
Insert a Supplier Debit and dissect the debit against the Income tax liaiblity account for the amount to be paid
By inserting a supplier debit, the general ledger affect will be - Debit the Liability Account and Credit Trade Creditors.
See link Entering Supplier Debit through Cards
Then make the payment and allocate the payment against the supplier debit
Insert onto the Supplier Card of ATO, a Supplier Payment from the right bank account, tender,date etc for the amount equal to the supplier debit and allocate the payment against the supplier debit
By inserting a supplier payment this will Debit Trade Creditors and Credit the Bank
See link Entering a new supplier payment through cards manually

As you make your weekly or mothly repayments for your Company Income Tax, insert a supplier debit and supplier payment.