NZ Sole Trader here. When I go to submit my Income Tax return to IRD I run off a P&L report in MYOB and then cross check all of the expenese against spreadsheet with formulas etc... One thing I'm a little confused about is MYOB is showing my Income Tax paid line in the expenses section and I assumed that I can not claim this as an expense seeing as it's Income tax. But the way MYOB displays it, it adds the Income Tax paid in that Financial year to all the other expenses and then you have an obviously much bigger total expenses. I guess it depends on where the Income tax is being paid from - personal or sole trader account. I pay it out of my sole trader account. As I'm a sole trader as opposed to a Limited Company they are the same IRD number anyway so not sure it really makes much of a difference other than I only really have transaction coming from my company account into MYOB. I guess if I paid my Income tax out of my personal account then they wouldn't be showing here and I wouldn't have this question.
Should I just be claiming the actual expenses LESS Income Tax paid or am I allowed claim expenses + Income tax paid ("Total Expenses" line in MYOB essentials P&L Report.)
It seems logical on one side to claim the Income tax paid as an expense because if you don't then the lack of that figure pumps up your business profit for the year by that amount and income tax paid is obviously not company profit! But then it feels like it's not really a claimable expense either so I'm confused.
Please help!
Thanks.
