How to adjust for shareholder salary in the Tax Calculations workpaper

How to enter the shareholder salary correctly so the profit figure in the TCP workpaper reflects the correct position.

After allocating the shareholder salary, the amount may still show as a profit on the Tax Calculations (TCP) workpaper. This article explains how to enter the shareholder salary correctly so the profit figure reflects the correct position.

Steps

  1. Open the Tax Calculations, TCP workpaper.
  2. Click the Edit button.
  3. Enter the shareholder salary in the row titled Less proposed shareholder.
  4. Click on the blue icon appearing next to Net Profit/(Loss) Per Accounts.
  5. From the account list that appears, unselect the shareholder salary code.
  6. Save the changes.

Why this is needed

This adjustment ensures the shareholder salary is properly allocated and the profit figure reflects the correct position. Without it, the salary amount continues to show as part of the profit in the TCP workpaper even though it has been allocated elsewhere.

Both steps are required: entering the amount in "Less proposed shareholder" and deselecting the salary code from the account list. If you only enter the salary amount but do not deselect the account code, the profit figure will still include the salary.