02-11-2011 08:43 PM
On my ANZ bank statement, I get an entry every month regarding interest earned on my savings account:
Credit interest paid $48.08 (deposit)
Resident Withod Tax on interest paid $22 (withdrawal)
How should I record these in LiveAccounts? For the intereset payments, I see a relevant category for Interest Income, but to which account should I allocate the RWT witholdings paid?
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02-11-2011 09:33 PM
I suggest you record the interest against "Other Income Accounts"- Interest Income
I also would create a special account to offset the tax payment.
If you were a company you should post to the Provision for Taxation Account, but assuming you are a Sole Trader, you could create a special drawings account in the Equity section called Tax Paid to keep tabs on amounts paid.
Also I recommend you supply the bank with your Tax File Number, so they stop withholding the tax in the future.
03-11-2011 01:10 AM
Thank you Cathie for the reply. The accounts are for a new company - I know next to nothing of bookkeeping so appologise for the newbie questions. MYOB LiveAccounts doesn't have a 'Provision for Taxation' account, so I guess I should create it. Is it an equity account? It sounds like a liability, but since it is already paid, I guess it should be something else?
I'm pretty sure I gave the bank my TFN when they set up the business accounts...are company accounts handled differently, or should I just get in touch with them again and provide the TFN to stop them witholding?
Again, appologies for the newbie questions, I'm just learning the ropes.
03-11-2011 07:28 AM
As you are a company, all tax instalments go to the Provision for Taxation (Liability) Account.
I know this will produce a debit but this will offset against your tax bill at the end of the year.
Yes, I suggest you contact the bank again about the withholding. They may even reverse the amounts already taken, if they haven't already sent it to the ATO.
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