Income tax - personal accounts

[Trevor Barton]

Jim wrote:
> On Saturday 26 July 2003 10:09 am, Aldous Everard wrote:
> 
>>I have a very basic question which I can't find the answer to in the
>>Gnucash Guide How do I enter income tax for my personal accounts?  Does
>>this go into the equity section, and if so when I enter it there, which
>>account does it balance with?
>>
>>tia
>>Aldous
>>
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>>gnucash-user mailing list
>>gnucash-user at lists.gnucash.org
>>https://lists.gnucash.org/mailman/listinfo/gnucash-user
> 
> 
> The way I do it, I include the amount I pay in tax as income and transfer it 
> from income to an expense account.
> 
> As an example, if my gross is $1000, and my check is for 800
> 1000 comes out of income, 800 goes into checking, and 200 goes into 
> expense:taxes.
> 
> If I get a refund, I just make it income.  I suppose I could be more correct 
> than this (If I got really big refunds, it would artificially inflate the 
> amount of tax I pay, since I don't account for the refund as lowering my 
> tax), but my goal is just to keep track of taxes I paid, and income, so it 
> suffices.

Why not just transfer money back from your tax account into your checking 
account?  That way the tax account reflects accurately the amount of tax you 
have actually paid.  As I understand it, "Income" and "Expense" are only labels 
that determine the sign of the balance on an account, you can move money in 
either direction for both of them.


-- 
Trevor Barton
Isotek Electronics Ltd., 9 Clayton Wood Bank, Leeds, LS16 6QZ, UK.
Tel: +44 (113) 275 1339  Fax: +44 (113) 224 9827 Web: www.isotek.co.uk
Views expressed are my own and not necessarily those of Isotek Electronics Ltd.