Use this section if your Market Center is profitable and past the break-even point (Retained Earnings and Current Year Profit [Loss] accounts added together equals a debit balance). Verify your Market Center’s profitability for the current month by checking your Standard Profit and Loss Report. The tax adjustment adjusts the amount of Owner Profit that the market center will profit share on so that the Owners are paying profit share on an “after tax” profit amount.
- Download the tax workbook (attached below). If you have one of your own provided by your OP, follow the proper steps, complete step 2, and then skip to step 6.
NOTE: This download will allow you to determine the profit after Bonuses, Royalties and Profit Share have been booked to allow you to calculate the tax entry
- Complete all of the steps on the Transmittal Checklist through the Print Monthly Profit Share Calculation step.
- Confirm the tax rate on the Enter Info Here tab in the workbook is set for your Market Center tax rate. (The maximum is 30 percent of net profit unless approved by Region and KWRI for additional amounts).
- Using your most recent KW Financial Statement online and the Profit Share Calculation printed after completing Step 1, fill out the Enter Info Here tab of the worksheet.
- Complete the Tax Worksheet tab as needed.
- Book your bonuses and taxes in AccountEdge.
- Complete the “Set Costs” step in WinMORE again to reset costs.
- Print out your final KW Financial Statement and Profit Share Calculation Report.
- Compare the final Profit Share Calculation Report to the Tax Worksheet tab under the section titled “Review against final PS Calc Report."
- Enter the calculated tax amount in your accounting software. Note: The entry you will use depends on the Market Center’s taxable organization type.
If the Market Center is a corporation that pays taxes directly to the government, the entry will be a Debit to Income Tax Expense (above the line) and a Credit to a Tax Payable account.
If the Market Center is an entity where the income flows to the owners and they pay the tax on that income (ex: LLC, Partnership), the entry will be a Debit to Income Tax Expense (above the line) and a Credit to Reverse Income Tax (below the line).