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KathrynMackenzi's avatar
KathrynMackenzi
Contributing User
4 years ago
Solved

PAYG Instalments and tax return

Hello,

 

Each time I lodge a BAS I post the PAYG Instalment to the PAYG Instalment asset account. Is there a journal entry that I’m supposed to do once the tax return for those periods has been lodged? There must be or else that asset account would continue to increase over time when the instalments have already been used in the tax return each financial year. I can’t figure it out. Thanks Kathryn

  • Tracey_H's avatar
    Tracey_H
    4 years ago

    Hi KathrynMackenzi 

     

    Thanks for your post. You are correct that a general journal would be processed to account for the PAYG Instalments. Generally speaking, your accountant would provide you with a list of end of year adjustment journals, including the PAYGI journal, to be recorded in your software once your tax return has been lodged. Or, if you have invited them as a user in your file, they may record those journals themselves. 

     

    Please let me know if you need further help.

     

    If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

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  • Tracey_H's avatar
    Tracey_H
    Former Staff
    4 years ago

    Hi KathrynMackenzi 

     

    Thanks for your post. You are correct that a general journal would be processed to account for the PAYG Instalments. Generally speaking, your accountant would provide you with a list of end of year adjustment journals, including the PAYGI journal, to be recorded in your software once your tax return has been lodged. Or, if you have invited them as a user in your file, they may record those journals themselves. 

     

    Please let me know if you need further help.

     

    If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

    • DuncanS's avatar
      DuncanS
      Ultimate Partner
      4 years ago

      KathrynMackenzi Tracey_H 

       

      Kathryn,

       

      The Journal is Dr Income Tax Payable  Cr PAYG - I

       

      If Income Tax Payable is in debit after calculating tax payable, I transfer to a Current Asset called Income Tax Refund 20xx.

       

      I do a Journal for BAS April - June 20xx crediting BAS April - June 20xx.

      This ensures the PAYG - I for Q4 is recorded in the current FY.

       

      I would check the Journals provided by/prepared by your Accountant to ensure you understand the workings of your Tax Accountant. I know that some BAS Agents suggest to business owners that they review the Journals provided by the Accountant before signing the Tax Return.

       

      Duncan