Add tax adjustments not linked to the trial balance

Overview

Sometimes, tax adjustments may be required in TaxLab that are not linked to existing trial balance accounts. This can be done either by adding a standalone workpaper not attached to an account, or creating a new account in the trial balance. Depending on the option selected, the adjustment will show up under different headings in the Tax Position.

Option 1: Add a permanent difference workpaper, not attached to an account

1. From the TaxLab home screen select the name of the entity.
2. Select the Income Tax tab, then select the relevant tax year.
3. From the entity's tax year summary, in the navigation bar select Workpapers > Workpapers.
4. Select New workpaper > Permanent difference. This creates a permanent difference workpaper that is not attached to a specific account in the trial balance.
5. In the Tax narration field enter a description; in the amount field, enter an amount.
6. From the navigation bar select Tax Position. The adjustment appears under the Permanent differences section. 

Option 2 – Add a new account to the trial balance

1. From the entity's tax year summary, in the navigation bar select Workpapers > Accounts.
2. Select New. 
3. In the Statement dropdown, select where to add the account. Enter the Account Code, Account name, and a Debit or (Credit) balance. Select Add. 
4. If the account was added to the Income Statement, select the settings cog on that row, and select Financial reporting.            
5. From the navigation bar, select Tax Position. The adjustment appears in the Financial reporting section of the Tax Position. 

Related articles

Assign accounts in a trial balance

Overview of accounts and the trial balance

Add or remove a workpaper