Record tax payments

Modified on Fri, 1 Aug at 12:34 PM

Overview

The tax payments section of TaxLab allows users to manage all tax transactions for an entity. Tax transactions can be directly populated into an entity from integrations with Inland Revenue or tax pools, or entered manually. Tags can be added to transactions to determine whether they impact the tax return, tax provision, and/or the imputation credit account.

Navigation

From the entity's tax year summary select Workpapers > Tax Payments.

There are three sections to the screen; the Terminal tax calculation, tax pooling estimate and Transactions.

Terminal tax

The Terminal tax section of the screen displays the Residual income tax calculation for the year, offset by any Provisional tax credits, to calculate Terminal tax. If the organisation has a tax pooling integration enabled (with Tax Traders or Tax Management New Zealandealand), any funds deposited into a tax pool by the entity will populate, calculating the remaining Tax to pay.

If you are preparing a tax reconciliation workpaper outside the software, the balance to pay for the year should reconcile to this section of the screen.

Minimise interest with tax pooling

The software will look at the date the previous year's income tax return was filed, the date selected for pooling settlement, and will calculate the estimated interest and penalty savings based on rates provided by the tax pools. Selecting Total savings opens a detailed tax pool quote notice.

If the previous year's return is unfiled, estimated interest will be unable to be calculated and no quote will be available.

Transactions

This is where all tax transactions for the entity are displayed, those obtained from integrations and any recorded manually.

The settings cog enables transaction export to excel, change the view, show pending and manual transactions, and lock or unlock the tax year.
New adds a new manual transaction. Select from Inland Revenue, Tax Transfer, Tax Pooling, or Intra-Group.
The up and down arrows expand and collapse groupings.
Show reversals (when ticked) displays debits and credits of any reversing transactions from the Inland Revenue integration, that net to 0. Any change made to a reversing transaction (such as ticking it as tax paid) will have the same effect on the other side of the reversal. Any reversals where both sides are not on the same date and cross tax years will always both display by default.
The calendar toggles between tax years, or displays all years.

Transaction groupings and views

Transactions are grouped under four categories: Inland Revenue, Tax Pooling, Intra-Group and Tax Transfers. Transactions under Inland Revenue are then grouped into five sub-categories: Tax, Credits, Interest, Penalties, and Other. The settings cog is used to view transactions in three different ways:

Grouped - Default
Grouped - Inland Revenue
All Transactions

Adding transactions

When a transaction is added, either manually or through an integration, there are multiple dates that can be selected.

Effective date: The date of the transaction in myIR. This is when the transaction is treated as paid or received by myIR and is the default date used for all following dates for transactions received through the IR integration.

Processed date: The date IR processed the transaction, which determines the tax year.

Journal date: the tax year date for tax provision purposes.

ICA date: the date the transaction will impact the ICA.

Instalment date: determines the provisional tax instalment date the payment or receipt aligns to.

Tax transactions with Inland Revenue

When an Inland Revenue (IR) integration is setup for your organisation, tax transactions will automatically import for your entities. TaxLab will import all income tax transactions that IR processes, including reversals which are often not visible in myIR. Therefore the volume of transactions that are displayed in tax payments may be greater than what is visible in myIR. Transactions that have been imported through the integration will display with a green dot beside them. To manually add an IR transaction:

Select New, then select Inland Revenue.
Select the Tax year.
Select the Account (Inland Revenue, or Inland Revenue - historic).
Select the appropriate dates, transaction type, and amount.
Select any additional checkboxes as needed. If you want the transaction to impact your tax return you will need to tick Applied as Tax Paid. If you want it to impact the imputation credit account select Impacts the ICA.
Optionally: add a note.
Select Save.

Tax transactions with tax pools

Transactions from tax pools such as Tax Traders or Tax Management New Zealand are automatically populated in the Tax Pooling section if you have enabled the integration. To manually add a tax pooling transaction:

Select New, then select Tax pooling.
Select the Tax year.
Select the Account (your tax pooling provider).
Select the appropriate dates, transaction type, and amount.
Select any additional checkboxes as needed. If you want the transaction to impact your tax return you will need to tick Applied as Tax Paid. If you want it to impact the imputation credit account select Impacts the ICA.
Optionally: add a note.
Select Save.

Intra-group transactions

To record the transfer of tax between entities in a group:

Select New then select Intra-Group.
Optionally edit the default tax year.
Select the entity for the transfer, transaction type, and enter the amount.
Optionally select tax provision checkboxes as needed.
Add a note explaining the transaction, then select Save.

Tax transfers within an entity

To record the transfer of income tax to different tax types, or between income years:

Select New then select Tax Transfer.
Select the tax year.
Select the transfer period.
In Transfer to account enter the entity you are working in, along with the IRD number.
Select the appropriate dates, transaction tax type, and amount.
Select any additional checkboxes as needed.
Optionally: add a note.
Select Save.

Refund transfer

To transfer income tax refunds to multiple accounts and taxpayers following Inland Revenue guidelines, refer to our article requesting income tax refund transfers.

Transaction badges

Each transaction displays 6 badges that can toggled on or off to determine whether the transaction will impact the tax return, tax provision, or imputation credit account. The options are:

Tax paid: the transaction will be recorded as tax paid or received in the tax return.

Pending: is pending confirmation.

ICA: impacts the imputation credit account

Movement: included in the Tax Provision > Tax Account Movements

Proof: included in the Tax Provision > Current Tax Proof

UOMI: impacts the use of money interest calculation