Home Forums Money matters How to account for $10K Cash Boost (and also GIC)?

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  • #1000199
    bongoman
    Member
    • Total posts: 11

    I’m using QuickBooks and am wondering how to account for:

    1. the $10K Cash Boost credit I received after sumitting my March BAS

    2. the occasional General Interest Charge raised by the ATO against my company.

    At present, when I submit my GST QB creates a journal entry that:

    DR PAYG Withholdings Payable $X
    DR GST Liabilities Payable $Y
    CR ATO Clearing (BAS Suspense) $X + $Y

    When I make the combined payment to the ATO, I debit the ATO Clearing Account.

    I’m wondering what account the Cash Boost credit should be entered into? Do I debit ATO Clearing and maybe credit a Liability account?

    Also, should GIC charged by the ATO be treated as interest expense?

    #1223367
    JamesMillar
    Participant
    • Total posts: 1,675

    Its income to the business but not taxable. The credit should be to a revenue account (recommend separate so that your accountants ensure you do not pay tax on it).

    Unfortunately if you have a company this amount is likely to be taxed when the retained profit is paid out to shareholders. So its not really tax free (unless you have an unusual franking account balance at the time which is not necessarily likely). If you operate a trust, partnership or sole trader this is not a problem – fully tax free no issues.

    #1223368
    bongoman
    Member
    • Total posts: 11

    Thanks James — that makes sense!

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