Add an entertainment workpaper to an account

Overview

The entertainment workpaper is used to record the split between fully deductible, 50% deductible and non-deductible entertainment expenses, even when they are all included in one account. It can also be used to calculate GST on non-deductible entertainment, and exclude any prior year adjustments that have been included in the current year. This workpaper is designed to be used for trial balances where journals are not simultaneously posted to source data by TaxLab users, or for tax return only clients.

Add an entertainment workpaper

1. From the entity's tax year summary, in the navigation bar select Workpapers > Accounts.
2. (If relevant) from the Accounts screen select Trial balance.
3. From the Trial balance screen, locate the account that you want to add the workpaper to and in the Workpaper column, select Add workpaper.
4. From the Add workpaper drop-down, select Entertainment. This will add the workpaper to the account and create a link to it directly from the trial balance.
5. Select Entertainment to open the workpaper.  
6. In the Non-deductible field, enter the total amount (if any) included in that account which is subject to non-deductibility rules.
7. In the 50% deductible field, enter the total amount subject to 50% deductibility rules. Based on what you have entered, the Fully deductible field will populate with the remainder (if any).

The Return section of the screen displays the total entertainment expense to be added back as non-deductible. 

If last year’s GST entertainment adjustment journal has been posted into the current year trial balance, use the Rollover from prior period button to pull through the amount to exclude from the current year calculation. 

The bottom of the screen displays the GST Output Tax which calculates at 15% of this year's non-deductible entertainment expense.

The default tax form disclosure can be updated, and a query, note, or file added if needed.

Troubleshooting

I have already processed my GST on non-deductible entertainment journal

If you have already calculated your 50% non-deductible entertainment expenses outside the system, and recorded a journal to return the GST on non-deductible entertainment expense, then you do not need to use this workpaper as the amount on your trial balance will be partially GST inclusive. In your underlying trial balance, split the non-deductible portion of entertainment expense into a separate code, and add a Permanent difference workpaper to it, to mark it all as non-deductible.

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