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Regular Member
 
Group: Forum Members
Last Login: 30/03/2011 10:00:08 PM
Posts: 38,
Visits: 178
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Would you please advise how you would process a refund cheque from the ATO which contains:-
Foreign Tax Credits $39.00
Credit for Tax Withheld where ABN/TFN not quoted $ 541.00
Credit for Interest on Overpaid Tax $5.56
Amount Refundable $426.01
The Foreign Tax credits and tax withheld were accounted for in one year and the tax refund received in the next year. I can fax you the Notice of Assessment if required.
Regards
John
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MySF Administrator
Group: Administrators
Last Login: 4/11/2010 3:24:01 PM
Posts: 464,
Visits: 633
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Hi,
Yes, a copy of the document will help in answering your question. Our fax number is 03 9877 4437.
Regards,
MySF
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Regular Member
Group: Forum Members
Last Login: 30/03/2011 10:00:08 PM
Posts: 38,
Visits: 178
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| I will fax it to you in the morning.
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Regular Member
Group: Forum Members
Last Login: 30/03/2011 10:00:08 PM
Posts: 38,
Visits: 178
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| Did you receive the fax I sent yesterday as I have not received a reply?
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MySF Administrator
Group: Administrators
Last Login: 4/11/2010 3:24:01 PM
Posts: 464,
Visits: 633
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Hi,
The refund of $426.01 received can be recorded as a cash receipt, with two lines:
4130 Interest Received $5.56
2120 Income Tax Payable $420.45
The actual transaction created will be:
DR bank $426.01
CR 4130 Interest Received $5.56
CR 2120 Income Tax Payable $420.45
With regards to the foreign tax credit, refundable franking credits and credit for tax withheld, we need to ask for more details. When entering the dividends or distributions which included franking credits, did you enter that amount into the franking credit field on the dividend / distribution screen? If you did enter this information along with tax withheld and foreign tax credits when recording dividends and distributions, then you will probably not need to make additional entries as the year end process will make adjustments as needed. If you did not enter information about foreign tax credits, franking credits and credit for tax withheld please let us know because there are additional entries you will need to make.
Regards,
MySF
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Regular Member
Group: Forum Members
Last Login: 30/03/2011 10:00:08 PM
Posts: 38,
Visits: 178
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Yes I did enter all franking credits into the franking credit field on the dividend / distribution screen. The two tax withheld transactions where done off a bank statement and a general journal, but I have checked liability account 2135 - Witholding Tax Paid and there is a debit amount sitting there for $541.
So, on the basis of your reply, I should be okay when I rollover!
Do you agree?
Regards
John
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MySF Administrator
Group: Administrators
Last Login: 4/11/2010 3:24:01 PM
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Was the foreign tax credit of $39 also entered with distributions? This should be visible in account number 2220 Foreign Tax rebate. If this is so, then the year end rollover will look after it.
Regards,
MySF
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Regular Member
Group: Forum Members
Last Login: 30/03/2011 10:00:08 PM
Posts: 38,
Visits: 178
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Yes it was. I have checked account number 2220 Foreign Tax rebate, and it all appears okay.
Once again, thanks very much for all the help you have provided to me.
Regards
John
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Forum Guru
Group: Forum Members
Last Login: 12/07/2011 2:31:58 AM
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Hi
I've also got a tax refund. I understand I should credit a/c 2120 but I don't really understand why. I know a tax refund doesn't have to mean tax was paid to the ATO first so if I credit an account called "Income Tax payable" this year am I artificially reducing the current tax years due figure and will need to compensate for that later or is the current year tax liability captured by other entries? Sorry to be so dumb.
Regards
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MySF Administrator
Group: Administrators
Last Login: 4/11/2010 3:24:01 PM
Posts: 464,
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Scott,
We need to look up some more information in regards to your question and will post an answer as soon as possible.
Regards,
MySF
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