If any portion of your Fund’s income for the subject year was exempt current pension income, you will need to determine which expenses or portions of expenses are tax deductible.
Mclowd asks you to select the method you prefer for apportioning ECPI Deductions.
Depending on the structure of the Fund, you may be able to simply apportion expenses by application of a simple formula. If using the proportional method, calculate the Fund’s taxable income as a portion of the Total Income and multiply by total expenses:
Expenses * (Assessable Income / Total Income)
Alternately, you may choose to use manually apportion expenses.
Note: You must have saved a Tax Profile that includes a Pension account in order to access the ECPI step. ECPI is irrelevant if all accounts in your Fund are in Accumulation mode. You must save an ECPI $ amount prior to selecting the Deductions Apportionment method. If no ECPI $ amount has been saved, Mclowd will not process the Deductions Apportionment Method correctly.
Manual apportionment will usually be more appropriate for Funds that have segregated assets, as expenses specifically relating to assets held in a segregated account that was in 100% accumulation or transition to retirement mode for the entire year may be fully deductible (depending on the expense type).
If you choose Manual Apportionment, a dialog displays when you click the SAVE button.
Choose thelink to manually edit deductions.
Mclowd will display the Section C: Deductions – Taxable Income screen with Deductions shown. You can now transfer Non Deductible Expenses to the right-hand column. The Deductions amount will update automatically and total Deductions and Total non-deductible expenses will be calculated according to your selections.
Choose SAVE DEDUCTIONS to save your changes, or RESET TO CALCULATED VALUES if you make a mistake and wish to start over. Note: If your ECPI $ and Deductions have not saved correctly, when you return to the Financial Years Steps screen, the ECPI Values step will show an exclamation mark and the words Edit Deductions in the Status column. Choose the link to edit your Deductions.
When all values have been entered and saved correctly, Mclowd will display a green check mark and the word Saved.