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User
Posts: 7
Registered: ‎27-10-2011
Australia
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Allocating interest and RWT payments

Hi, 

 

On my ANZ bank statement, I get an entry every month regarding interest earned on my savings account:

 

E.g.: 

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?

 

Thanks

Ultimate Partner
Posts: 943
Registered: ‎30-03-2009
Australia
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Re: Allocating interest and RWT payments

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.

Cathie Robilliard
BCom. (Acc/Finance) UNSW
MYOB Certified Consultant
BAS Agent
email:cathier@optusnet.com.au
Servicing Sydney South, NSW
User
Posts: 7
Registered: ‎27-10-2011
Australia
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Re: Allocating interest and RWT payments

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.

 

Thanks

Ultimate Partner
Posts: 943
Registered: ‎30-03-2009
Australia

Re: Allocating interest and RWT payments

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.

Cathie Robilliard
BCom. (Acc/Finance) UNSW
MYOB Certified Consultant
BAS Agent
email:cathier@optusnet.com.au
Servicing Sydney South, NSW
User
Posts: 7
Registered: ‎27-10-2011
Australia
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Re: Allocating interest and RWT payments

Thanks again, Cathy, much appreciated!