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How to calculate the Doubtful Debts allowance

Posted 15 April 2016

Sisco says:
15 April 2016 at 10:32

If provision for doubtful debts balance in 2015 was R120,000 (2014: R60,000) relating to a specific debtor. In 2014 income tax return the taxpayer claimed a doubtful debt allowance of R15,000. What is the income tax adjustment in 2015?

TaxTim TaxTim says:
15 April 2016 at 10:57

You would add the R15 000 back from 2014 and then deduct the 25% of the new balance (25% X R120,000 = R30,000) .So effectively claim R30 000 less the R15 000 adjustment.

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