Tax & Accounting Blog

Use Custom Tax Codes for Integration with UltraTax CS and GoSystem Tax RS

CS Professional Suite Accounting & Auditing Solutions January 20, 2015

In Accounting CS, tax codes are a set of predefined groupings that are assigned to accounts. After assigning tax codes, you can generate reports in Accounting CS that list combined account totals for each tax code. You can also use tax codes to export amounts to other tax applications, such as UltraTax CS or GoSystem Tax RS.

Adding custom tax codes at the client level:

  1. In Accounting CS, choose Setup > Tax Codes, select the client and click the Add (Pre-defined tax codes cannot be modified.)
  2. Select a Tax code from the drop-down list in that field.
  3. In the Subcode field, enter one or two alphanumeric characters to represent the new custom tax code.
  4. Enter a short description for the new item.
  5. Click Enter.

Note: You can also add custom tax codes on the fly for a selected client from the Setup > Chart of Accounts screen.

Adding custom tax codes at the firm level: 

  1. Choose Setup > Firm Information > Firm Tax Codes and click the Add button.
  2. Select the Entity type and Tax code from the appropriate fields.
  3. In the Subcode field, enter one or two alphanumeric characters to represent the new custom tax code.
  4. Enter a short description for the new item.
  5. Click Enter.

Note: Custom tax codes added at the firm level are available for all clients. However, they will only be accessible for clients that are created or converted after they have been added at the firm level. For any clients that were created or converted before the firm-level tax codes were created, you will need to add in the tax codes at the client level.

Example

The following scenario illustrates the advantages of creating custom tax codes.

A client has several utilities and insurance expense accounts already set up in their Chart of Accounts. The expenses for these accounts relate to tax code 213 (1120, other deductions). The client wants to group these expenses as just two items (utilities and insurance) for tax integration purposes.

Assigning the single, predefined tax code 213 to these accounts yields unnecessary detail for both utilities and insurance in the tax export and tax reports. By assigning custom tax codes 213-1, Utilities and 213-2, Insurance, all the utilities expenses are grouped together as Utilities and all the insurance expenses are grouped together as Insurance to provide the necessary summary information for these separate groupings in both the tax export and the related tax reports.