Dext has a specially-designed module to help tax professionals track their clients’ deductions for their business tax returns. This module ensures that your clients’ deductible expenses can be accurately tracked, whether they’re self-employed, a partnership, or incorporated (like a C-Corps or S-Corps).
Important Note: The Self-Employed module is for business returns where a tax professional has no access to a client’s General Ledger. Self Employed is available in the Canada and the US only.
This article explains how to use this module for creating tax summaries for expenses. Doing this will ensure a more streamlined business deduction workflow for clients.
Tax Codes
You will notice that all categories in the Self-Employed module will reflect the tax codes necessary for completing Schedule C for the US or T2125 for Canada.
For LLC and other business types, you can upload your own tax codes through a CSV file, by navigating to Business settings, Lists then Categories.
To do this in the Legacy Dext experience, go to Categories under Lists in the sidebar navigational menu.
Bank Statements
The Self-Employed module allows for your bank statements to be submitted, tax codes applied to them and these to be automatically matched through using Bank Match. It also enables you to set up automated tasks on them, or to add your set of own tax codes, or suppliers.
Submitting bank statements to Dext Prepare Self-Employed follows the same process as those for Small Business Clients.
Once your client’s bank statement has been processed, the statement will be accessible via the Transactions page in the Bank section. This page will contain a list of all the transaction lines that have been extracted from the bank statement, including the date, description, and the amount of money in or out.
The transaction page includes the ‘Match’and ‘Action’ columns, which will help you manage transactions and their matching documentation.
You can discover how to include any bank transactions in a Tax Summary using Bank Match, Request Paperwork, or Cash-Coding in the sections below.
How to Process a Matched Bank Transaction
If the bank transaction has a yellow ‘Match found’ icon in the ‘Match’ column, search the Inbox for the transaction with the same date and total amount. If the match is correct, there is nothing else you need to do.
However, if the match is incorrect, you will need to cash-code the bank transaction. Please refer to the section below for instructions on how to do this.
How to Process an Unmatched Bank Transaction
If the bank transaction does not have a ‘Match’ icon, or the match is incorrect and another user on the account is the document owner, you can send a request to the user for the missing paperwork. To do this, follow the instructions in this article.
Alternatively, you can also create a supporting item by cash-coding the transaction.
To do this:
- Next to the transaction, click the Cash code button.
- In the pop-up window, confirm the details of the transaction, then select a supplier and a document owner. When ready click Create.
- Dext will then generate an item in the Inbox that corresponds to the bank transaction.
- In the Bank Transactions tab, next to the specific bank transaction the ‘Cash-Code’ button will be replaced by ‘View Item’. Clicking this will take you to the corresponding Inbox item.
The cash-coded item will be included in the Tax Summary export.
Tax Summaries
You can create Tax Summaries at any time for a quick overview of all tax incurred for expenses and income for your company, or for your C-Corp or S-Corp clients if you manage their tax returns.
To download your tax summary:
- On the Costs or Sales Inbox page, click the Tax Summary button at top of the page.
- Select the relevant date range, and identify the source from which the Tax Summary will be created. When ready click Download.
How to Include Bank Transactions in your Tax Summary
Transactions that have a matching receipt or bill in the inbox will be included in the tax summary.
If the bank transaction does not have a Match icon, you will need to create a supporting item by Cash-coding in order to include it in the Tax Summary. See this section above on how to cash-code.