How to best handle Imputation Credit (Australia); Tax related

[Michael Gordon]

Thank you, Peter. Have to give the handling - or ignoring - of Imputation
credit some more thought.

Tax - not interested in doing anything complicated with this. My interest
was mostly if it eased the handling of Imputation credit.

Do you bother to separately record Franked and Unfranked dividends? I'm
beginning to wonder if that's worth the bother, too.

For years I used a program I wrote in C++ but now my compiler isn't
compatible with the newer operating systems so any updates to the program
are an issue plus the fact that my C++ is very rusty indeed. The program
had the great advantage that I could arrange things how I liked, though, as
an engineer, these arrangements didn't follow proper accounting procedures!
With GnuCash I have to do things 'right' and I think also I should revise
my thoughts on was is really worth the trouble of entering and tracking.

Mike.


On 12 July 2013 17:56, prl <prl at ozemail.com.au> wrote:

> Hi, Michael.
>
> I don't record Imputation Credits* in Gnucash. But then I don't put any of
> my tax through GnuCash, and I don't normally get a payment back from my
> tax. I just pay any excess owing to the ATO into an Expenses:Tax account.
> But I only ever have a few hundred dollars in imputation credits anyway. If
> you have a large amount relative to your income, then it may be worth the
> effort tracking it.
>
> The tax arrangements for superannuation pensions are too complicated for
> me to try to deal with them through GnuCash in any way that comes close to
> reflecting reality. I only get an annual statement of the tax on my pension
> anyway (at the end of the FY). I just budget for what I guess I'll have to
> pay the ATO at the end of the year.
>
> You could make an Asset:Imputation Credit account, pay into it when you
> get your dividend statements, and regard some (or all) of your tax return
> cheque as having come from that from that account, and do a split payment
> into the account that you pay the cheque into.
>
> On the Tax Related checkbox, I've never seen anything remotely related to
> Australian income tax in Gnucash. But that may be because I've simply
> assumed there won't be anything and haven't looked hard enough :)
>
> * For non-Australian readers, Imputation Credits are effectively an
> allowance for the tax the company has already paid in company tax on
> profits that are being redistributed as dividends. If your marginal income
> tax rate is below the company tax rate, Imputation Credits are effectively
> negative taxation on the dividends.
>
> Cheers,
> Peter
>
>
> On 12/07/13 11:05, Michael Gordon wrote:
>
>> I'm running GnuCash 2.4.13 on Windows 8.
>>
>> 1. Imputation Credit
>> Just starting to enter data and am stuck on how best to handle Imputation
>> credit when recording dividend income.
>> In Australia, those with low income tax rates can claim back tax that has
>> been paid by companies when they declare dividends.
>> A dividend statement has three elements:
>> Franked amount (the amount on which the company has paid tax)
>> Unfranked amount (the amount on which the company has NOT paid tax)
>> Imputation or Franking credit (the maximum amount that you may be able to
>> claim back from the government when filing your tax return)
>>
>> So, the cash paid at dividend time is the total of Franked and Unfranked.
>> I know that I can record this as a split transaction.
>>
>> But what to do about the Imputation Credit? As a retiree I get most if not
>> all of this so it is a kind of delayed income, but I'd like to keep track
>> of it as dividends are paid.
>>
>> 2. Tax related. This check box appears to be unavailable. Only viable for
>> US users, perhaps?
>>
>> Mike.
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