Setting up tax subcodes for your firm

Alerts and notices

In addition to using the predefined tax codes in AdvanceFlow, you can use subcodes to define custom tax codes for firm-specific tasks. Example.

The Trial Balance for Client A (an 1120 client) includes several expense accounts for insurance and utilities. These expenses relate to tax code 213 (1120, Other deductions), but the client would like to be able to group these expenses as two items (insurance and utilities) for tax integration purposes.

Assigning these accounts to a single tax code (213) would yield unnecessary detail for both insurance and utilities in the Tax Code report and when the data is imported to the tax return.

By assigning custom tax codes 213,500 - Insurance and 213,900 - Utilities, you can group all of the insurance expenses together as Insurance and all of the utilities expenses together as Utilities. This will provide the necessary summary information for these separate groupings within the Tax Code report and the tax return.

If the Modify Tax Codes administrative permission is enabled for your account, you can set up tax subcodes as follows.

  1. Click the Administration button at the bottom of the navigation pane, and then click Tax Codes in the navigation pane.
  2. Click the appropriate tab along the top for your tax vendor.
  3. Select the applicable entity.
  4. In the Codes pane, click the tax code to which you will add a subcode.
  5. Click the Add Add button button.
  6. Enter the subcode and description in the provided fields, and then click OK.

Note: To add, edit, or delete tax subcodes for a prior year, choose another year from the Tax Year field above the Subcodes pane, select the applicable tax code and subcode, adjust the item as needed, and click the Save button.