TFN Deduction for Income

Dean Robinson

Hi,
I have just recorded a dividend in Reckon Accounts Personal Plus 2018 which has a TFN deduction associated with it. I entered the gross amount of the dividend as an unfranked amount and the TFN deduction is then applied against this to create a reduced net dividend. I note that the TFN deduction results in a "MiscExp" transaction in the register but it does not seem to reduce the cash balance in the account of the TFN deduction.
When I view the account in Portfolio, the cash balance shown also includes the TFN deduction amount. I can sort of understand why it does this as the amount is not truly an expense, it has just been withheld until it can be claimed back.
My question is, what transaction do I apply in the register to claim the TFN deduction back when the time comes? If I just bring it in as income, how does the cash balance in the account know that the income relates to the TFN deduction.
I cannot access anything in help about how TFN deductions work.
Any advice?

Dean Robinson

Hi Dave,
I used the "Record an Income Event" on an investment account to enter the transaction. As an example, I recorded $1000 as "Unfranked Dividend" which was the gross amount of dividend issued. I had $200 of withholding tax taken out of this and I entered this amount in the "TFN Amounts Deducted" field. I did not use the Misc Exp field and I did not transfer balance.
When I entered the event, it generated two transactions in the investment account register - the first was an action code = "DivUF" with amount $1000 and this increased the cash balance in the account by $1000. The second transaction had an action code = "MiscExp" but with a category of "_TFNdeduct" - but it did not reduce the cash balance in the account at all (which is what I was expecting).

The only way I can see to get it to do what I want is to instead use the "Miscellaneous" field of the "Recent in Income Event" for the withholding tax and specify an appropriate expense category.

I am trying to work out how TFN deduction field is supposed to work if you have a TFN withholding.

Does that help?

John Campbell

Based on recent experience, TFN deductions are not associated with your tax file number and so there may be a problem getting a credit for this.

Did you enter the miscellaneous expense as 200 or -200 ?

Dean Robinson

Hey Dave,
I double clicked on the TFN Deduction transaction in the register to bring up the entry window - just to see what the individual transaction contained. It looked ok with the TFN Deduction Amount and a negative amount for proceeds. When I clicked on "Enter/Done" the balance now incorporated the negative amount. All good. Weird - but fixed.
I will still run validation and super validation to just check the integrity of my file.

Thanks for your help.

Cheers,
Dean