How to handle Tax refund or tax paid to clear imputation credits

RobbieG

Hi all, apologies if this has been asked previously but I can't seem to find an answer, and the more I think about it, the more I go around in circles.

I am using Personal Plus 2022 and I'm unclear how to handle a personal income tax refund so it clears the imputation credits that have been included in my ATO tax assessments. Likewise if I have a tax bill (I had a credit in 2022 and a debit in 2023).

I have a personal bank/cash account that would either receive a refund (2022 assessment) or pay a bill (assessment 2023). Both years have franking credits recorded into an Asset account called "Imputation Credit" from dividends received. This somehow needs to be reduced as it is included in the tax assessment.

So, how do I enter this correctly and what categories should I use?

I cannot do journal entries so I am thinking i would create a split transaction in my bank/cash account that records:

• The refund (or tax paid) to an expense category called "Tax Assessments"
• A transfer from the Asset account called "Imputation Credit"
• An equal amount (as the "Imputation Credit" transfer) to expense category "Tax Assessments"

It seems to work in that the imputation credit is reduced however I don't believe it is the correct way to do this, and the more I think about it, the more complex it becomes to me.

Can someone please advise the simple way to think of it and to achieve this.

TIA

GerryWinter

I think you are over thinking it, i have never tried to do anything that the program does by its self, you just need to show the income from a tax return and the payment if you have to pay tax.

Everyone has their own way of showing things.

RobbieG

Thanks for your reply Gerry,

I understand I can do that, which is what I had been doing, however the problem still exists that the balance of the imputation Credits Account continues to grow with each dividend I receive year in year out.

This balance needs to reduce after each tax assessment. Should I simply transfer the money out? But to where?

GerryWinter

As the program is date based when you do your reports that should not show what happened in last years reports, i may be wrong