Re: Finding out taxable income at the end of the year
Michael brings up a great point. Here’s another traditional accounting term to search for: “allowance for doubtful accounts.” It usually resides as a sub-account of A/R. It is a contra-account which means it normally has a credit balance. (assets normally have a debit balance) You use the account by balancing it against Bad Debt Expense. Here’s a decent write-up on the subject: https://www.accountingtools.com/articles/2017/5/15/the-allowance-for-doubtful-accounts Regards, Adrien > On Mar 8, 2018, at 7:17 AM, Mike or Penny Novack > wrote: > > On 3/8/2018 4:06 AM, Maf. King wrote >>> I cannot look in income:sales to >>> determine how much taxable income I report, because it would include how >>> much I'm owed also. >>> >>> >>> As such, what is the best way to find out how much taxable income I make >>> per year to report on my taxes? >>> >> Hi, >> >> This is the difference between "accruals" accounting and "cash" accounting. >> >> Basically, GC's invoice module uses accruals - the tax is calculated based on >> when you create the invoice, not when you are paid. > This is partially a case of "not a gnucash question" > > Maf. King gave you an answer that partially addresses the "what if my books > are kept accrual but I report taxes on the cash basis?" > > But there is another part of this. As anybody in business knows, SOME of what > you are owed never gets paid. In other words, there needs to be a periodic > adjustment for "bad debt" and/or the loss when outstanding debt is sold to a > collector for less than the face amount. Before asking us "how do I do this > using gnucash?" you need to look up "how this is handled in any accounting > system". Once you understand THAT (what the transactions would be) you might > easily see HOW to enter in gnucash or you ask us at that point. > > I will just give hints (ideas of what terms you might search for) "bad debt" > (generally an expense) "journal transactions" (a term for this sort of > adjustment) > > Michael D Novack > > > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > - > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: Finding out taxable income at the end of the year
On 3/8/2018 4:06 AM, Maf. King wrote I cannot look in income:sales to determine how much taxable income I report, because it would include how much I'm owed also. As such, what is the best way to find out how much taxable income I make per year to report on my taxes? Hi, This is the difference between "accruals" accounting and "cash" accounting. Basically, GC's invoice module uses accruals - the tax is calculated based on when you create the invoice, not when you are paid. This is partially a case of "not a gnucash question" Maf. King gave you an answer that partially addresses the "what if my books are kept accrual but I report taxes on the cash basis?" But there is another part of this. As anybody in business knows, SOME of what you are owed never gets paid. In other words, there needs to be a periodic adjustment for "bad debt" and/or the loss when outstanding debt is sold to a collector for less than the face amount. Before asking us "how do I do this using gnucash?" you need to look up "how this is handled in any accounting system". Once you understand THAT (what the transactions would be) you might easily see HOW to enter in gnucash or you ask us at that point. I will just give hints (ideas of what terms you might search for) "bad debt" (generally an expense) "journal transactions" (a term for this sort of adjustment) Michael D Novack ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Re: Finding out taxable income at the end of the year
On Thursday, 8 March 2018 06:38:23 GMT H0wdy wrote: > Hello everyone, > > > I do invoices throughout the year and have the income go to > income:sales. However, I don't necessarily get paid in full for the > invoices, so at the end of the year, I cannot look in income:sales to > determine how much taxable income I report, because it would include how > much I'm owed also. > > > As such, what is the best way to find out how much taxable income I make > per year to report on my taxes? > Hi, This is the difference between "accruals" accounting and "cash" accounting. Basically, GC's invoice module uses accruals - the tax is calculated based on when you create the invoice, not when you are paid. As a thought, you could look at total Income:sales, then (manually) deduct the balance of the A/R account on your reporting date - so if you have written an invoice for say £100, but only had partial payment of £75, sales should show £100 and A/R still show £25 as owing. HTH, Maf. ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
Finding out taxable income at the end of the year
Hello everyone, I do invoices throughout the year and have the income go to income:sales. However, I don't necessarily get paid in full for the invoices, so at the end of the year, I cannot look in income:sales to determine how much taxable income I report, because it would include how much I'm owed also. As such, what is the best way to find out how much taxable income I make per year to report on my taxes? T/y ___ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. - Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
