Tax Accounting on Interest

[pfoomer]

Hi

can someone advise the best way to account for interest where tax is collected at source..

for example.

A.
entered gross 100.00

entered taxed 10.00 Collected

Account Balance 100.0 (but 10.00 has been collected?), surely should be 90.00

Report on this transaction shows

Gross 90 (surely thats the net), taxes 10, Total (the Gross?) 100.

should this read Net, Tax, Gross?

B.

entered received net 90.00

entered taxed 10.00 Collected

Account Balance 90.0 , this shows balance after tax

Report on this transaction shows

Gross 80 (huh), taxes 10, Total (the Gross?) 90.

Confused

Peresphone

 

[stanbusk]

Why don't you create several transactions? One for the gross amount and one for the tax...

 

[pfoomer]

Tax Accounting

Why don't you create several transactions? One for the gross amount and one for the tax...

Well I did originally, then I found the report on Tax, so I thought this was the best way to go, it is workable, but I will need to contra out the tax at year end to get the correct balance, as oppose to having it calculated as I go along.

This begs the question, what is the tax box for in a transaction, if I pay the tax, whatever form, VAT, Tax on income, its gone from my account, I just need to know the current daily net balance, and the tax I have paid, for tax accounting purposes

 

[stanbusk]

The tax fields on the transaction entry panel are just here to later generate the tax report. They have no influence over the other fields. In other words, when adding a transaction for an invoice you can optionally add the tax information in case you are interested in getting a tax report in the coming months. This system however doesn't server all needs. There is a FAQ entry about this question here VAT handling.