For amended tax assessments of previous years, I made general ledger entries for shortfall in tax paid and some tax refunds. I used the bank account and liability account 2120 (Income tax payable). Now these amounts are included in the balance sheet under tax payable. My fund's auditor requires these to corrected.

Could you advise how amended tax assessment amounts (refunded or paid) should be treated in MySF.

Thanks 

Yes, I did this for three tax refunds for amendments for past years assessments. I did the opposite for one assessment amendment where the fund owed the ATO. So all the general journals I've done for these four transactions have the 2120 ledger account on one side balanced with the bank account on the other. I suppose I've got it wrong.

Thanks

Vik Chaudhri 

Could you please advise how I should have made these tax assessment amendment entries in MySF?

Thanks

The use of account 2120 is actually correct.

The tax refund is cash flow in, but does not count as income to the fund.

The tax refund should have been the same amount as what was calculated as due to you and these should therefore have netted off to zero. When the software calculates that the tax office owes you a refund of say $500 then this is stored as a credit in 2120, and when you receive the money it is posted as a debit of also $500. The two cancel out at the balance is zero.

Is there a difference in the amount calculated by the software and the amount you actually received as a refund?

Regards,

MySF

Anyway, now that the balance sheet indicates the incorrect amount of tax payable how do I get rid of this amount. Is it possible that I post a transaction to a non-taxable expense account to make the correction?

Regards

Sprry for the delay in replying.

I followed your suggestion and this was acceptable to the fund auditor.

Thansk

Vik