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

Fri Jul 12 23:50:16 EDT 2013

Maf, yes that does help. I'm slowly starting to think about things the
right way - I hope! so what you've described makes sense to me.
Many thanks,
Mike.

On 12 July 2013 21:00, Maf. King <maf at chilwell.net> wrote:

> Hi Michael,
>
> There is a similar concept in the UK, called "dividend tax credit".  I've
> never been in a position to even think about a reclaim.... but I do track
> it
> from year to year, as who knows what is around the corner.  It is far
> easier
> to record too much data in GC at the time and sum accounts in a report or
> spreadsheet than it would be to go back and split up transactions, IMHO.
>
> I record a dividend transaction as follows: (viewed from my receiving bank
> account - hope the indenting works ok!)
>
> Expenses:Taxes:DividendCredit   £2.60
> Bank:checking                           £24.00
> Income:Dividends:Net                                            £24.00
> Income:Dividends:TaxCredit                                      £2.60
>
> I'd imagine that In:D:Net would happily split as Franked and Unfranked in
> your
> case
>
> If I were to make a reclaim, I'd have a negative expense transaction from
> E:T:DC to Bank:Checking, which would have the desired effect of reducing
> the
> total tax paid and increasing the money available to spend on beer...
>
> Note, I'm not an accountant, these are personal books, and if the tax
> credit
> isn't really my expense in law (although I think it is), I don't really
> care -
> it works for me. Of course, YMMV.
>
> HTH,
> Maf.
>
>
>
> On Fri 12 July 13 19:53:37 Michael Gordon wrote:
> > 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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> Maf. King
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