How to enter tax deductions that usually occur for your clients and their entities BEFORE you do any tax planning
TaxPlan Estimated Taxable Income BEFORE Tax Planning
The aim is to build a picture of Estimated Taxable Income BEFORE Tax Planning by populating data throughout TaxPlan to show your client the comparison to taxable income after tax planning, as well as how much tax they can save which is the value of your tax planning advice.
It’s important to quantify that. Before you get to that stage, you need to put through any usual tax deductions because you can't claim that you've helped a client to save tax if they're doing what they've always done in prior years and there was no new advice for them.
Use the line item fields under Projected Income to 30 June to enter income data.
Also populate Tax Deductions from the green heading and Select a Deduction from the dropdowns to enter types of deductions as you go along.
Click the green + icon to the right of the green Tax Deductions heading to add as many deductions as you need and enter the amounts for those line items.
Estimated Taxable Income BEFORE Tax Planning will be automatically calculated as entity column fields are populated.
NB: With respect to dropdown item Div7A Interest Paid remember that's only Div 7A interest paid if your client is entitled to a tax deduction for it.
With respect to other interest paid, paid donations, super deductions or other deductions, if there's anything else that your client normally claims, put it through as Other Deductions and that then gives you Estimated Taxable Income before you do any exciting tax planning for your clients.