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This article applies to:

  • Product: ONESOURCE Indirect Tax,ONESOURCE Sales and Use Tax Compliance
  • Subject: Payments

Overview of prepayment process

There are 3 types of prepayment reporting:
  • Monthly prepayments due and applied on a monthly return.
  • Monthly prepayments due using monthly deposit returns/vouchers and applied on a quarterly return.
  • Monthly, quarterly, or semi-annual returns with an annual reconciliation.
important
The steps in the prepayment and tax return process are outlined in this article for each of type of prepayment reporting. These outlines are meant to give a basic overview of the process.
note
Prior to starting the prepayment process you'll need to:
  • Select your tax returns in
    Return Register
    .
  • If filing Florida Form DR-15 with DR-7, you'll need to set up your business locations in
    Locations
    .

Monthly prepayment due and applied on monthly return

  1. Navigate to
    Entities
    ,
    Configure
    , and then
    Prepayments
    .
    Perform one time setup to determine for each applicable tax return:
    1. Prepayment method
    2. Estimation rate
  2. Go to
    Binders
    ,
    Workarea Actions
    , and then
    Prepayments
    .
    • If prepayment method MANUAL was selected for a tax return in
      Prepayments
      , enter monthly prepayment amounts to be used as prepayment due for each tax period.
    • If prepayment method PY-SAME (Prior Year Same Period) or PY-AVG (Average All Periods Prior Year) was selected for a tax return in
      Prepayments
      , utilize
      Retrieve Prior Year
       to populate prepayment annual worksheet with prepayments based on historical data.
    • You'll need to have been using the system for at least one complete tax year to build the historical data for the prior year method.
  3. Import and compute transactional data.
  4. Go to Binders, select a
    binder
    , and the select
    Prepayments
    .
    1. Queue prepayments
    2. Review the prepayment amounts to be reported as due and applied. Make any changes as deemed necessary. This is the last chance to amend prepayment amounts to be transferred to the tax returns.
  5. Transfer data to tax returns.
  6. Next go to
    Binders
    , select a binder, and then
    Tax Return Summary
    . This is the last step in the prepayment process each reporting period. You need to queue and process the tax return summary. This is to ensure that the amount of prepayment due actually reported on the tax return for the current reporting period will be saved and stored to report next tax period as prepayment applied.

Monthly prepayments due and applied on quarterly return

  1. First two months of quarter:
    1. Process monthly prepayments returns/vouchers in monthly binder. The monthly prepayments are based on the transactional data processed each of the first two months of the quarter.
    2. At the end of the processing cycle each month, queue and process the tax return summary.
  2. Third month of quarter:
    1. Create quarterly binder.
    2. Import and compute transactional data.
    3. Perform roll-up.
    4. Navigate to
      Binders
      , and then
      Prepayments
      .
      1. Queue prepayments.
      2. Review the prepayment amounts to be reported as Applied. The quarterly worksheet will display the individual prepayment amounts for the quarter by tax period, and also display the total amount of prepayments to be reported as applied. Make any changes as deemed necessary. This is the last chance to amend prepayment amounts to be transferred to the tax returns.
    5. Transfer data to tax returns.

Monthly, quarterly, or semi-annual tax returns with an annual reconciliation

  1. Throughout the year:
    1. Process monthly, quarterly, or semi-annual tax returns as needed in the appropriate monthly, quarterly, or semi-annual binder. These tax returns are based on the transactional data processed each tax period.
    2. At the end of each processing cycle, queue and process the tax return summary.
  2. Annual Reconciliation Tax Return Due:
    1. Create annual binder.
    2. Perform roll-up.
    3. Navigate to
      Binders
      , and then
      Prepayments
      .
      1. Queue prepayments.
      2. Review the prepayment amounts to be reported as Applied. The worksheet will display the individual tax amounts for the year based on the filing status of the tax returns filed during the year, and also display the total amount of tax return payments to be reported as applied. Make any changes as deemed necessary. This is the last chance to amend the tax return amounts to be transferred to the tax returns.
    4. Transfer data to annual reconciliation tax returns.