Income Tax

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  • Updated 1 year ago
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I'm a sole trader (not a company) and have a TAX PAYABLE account set-up as an OTHER CURRENT LIBALIBITY. I'm assuming this manages GST only and when I manage tax and use PAY TAX or RECEIVE TAX REFUND, then I'm handling GST.

How is income tax handled in Reckon? My example chart of accounts has a DRAWINGS INCOME TAX listed as an equity account and I'm not sure what this is for. How do you track the T7 provisional tax listed on the BAS?

When I pay annual income tax or receive an income tax refund, how is it recorded?

I'm assuming the MANAGE TAX button is only for managing GST though I may be wrong. Where can I get some guidance around this?

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Jay Garland

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Posted 1 year ago

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Nathan Elcoate, Accredited Partner

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Hi Jay,

Yes that's correct, all that you have mentioned is based around and for, GST tracking, payments and refunds.

Regarding your income tax, only your Tax Accountant can calculate this for you.

Basically without giving tax advice, use your Drawings account (Equity), for any personal expenses, then this can assist your Accountant at year end to calculate your Income Tax.

Regards

Nathan
I presume you are a Sole Trader if so allocate Annual Income Tax paid/refunded to the Drawings Income Tax equity account.
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Jay Garland

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That's what I'd been doing. Many thanks. I'm assuming that includes putting the T7 provisional tax in the drawings equity account as well?