How do I record company income tax

Ensure you have the best process for company appropriations

First, make sure the chart of accounts is set up properly. 

• Must be Equity
• Must be mapped to EQU.UDE.3

The credit CR account

• Must be Liability
• Must be mapped to LIA.CUR.TAX.INC

Post the journal

30 June 20XX

DR - Income tax - 15,000

CR - Income tax payable - 15,000

Post the rollover journal

1 July 20XX

DR - Retained earnings - 15,000

CR - Income tax - 15,000