Home› Accounting› Accounting Technical Support

Tax on Interest

mikeldubmikeldub Member Posts: 6

Hi, Very new and confused.
My checking account earns interest and tax is paid on that
line 1: INTEREST - CR.INT .012c
line 2: IRD:TAX ON INTEREST .01c

I have assigned "line 1 Interest:"to category "interest income"
How do manage the line 2 "IRD tax"?

Do I create a new category in Chart of Accounts and to what? Liability?

I'm in New Zealand if that makes a difference to how its processed.

Many thanks
Mike

in Accounting Technical Support

Comments

  • AlexLAlexL Member Posts: 2,869 ✭✭✭

    Hi @mikeldub . I would not categorize this as a liability as any money categorized to a liability means that you intend on paying it back. I would categorize line 2 as a Bank Service Charges expense because it seems like this is more of an expense than anything.

Sign In or Register to comment.