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Tax Adjustment and Dissect in Journal Entries

What does Dissect mean within Journal Entries and how does it relate to taxes? 

Journal entries do not calculate or automatically separate tax. Both Dissect and Tax Adjustment are designed for manual control, not tax calculation, and should be used when the correct amounts are already known.

The Dissect option allows you to split a journal line across multiple GL accounts. Each amount entered is treated as an independent value, with no system logic to determine tax or taxable portions.
  • All split values are posted as direct amounts
  • No tax calculation or tax identification is applied
  • Reports (including Preview GL) will only show final posted values
Use Dissect when:
  • Allocating a total amount across multiple accounts
  • Reclassifying or redistributing existing values
  • You do not need the system to interpret tax

Tax Adjustment

A Tax Adjustment is used when posting directly to a tax GL account and you need the entry to be reflected in tax reporting.
  • Does not calculate tax
  • Requires manual entry of both the tax amount and related taxable value
  • Ensures the journal is included correctly in Tax Reports
Use Tax Adjustment when:
  • Recording tax outside of standard invoice workflows
  • Correcting previously missed or misstated tax
  • Posting directly to a tax GL account for reporting purposes

Reporting Behavior

  • Journals with Tax Adjustment → appear in Tax Reports
  • Journals without Tax Adjustment → appear in GL Reports only

Key Principle

Journal entries are direct GL postings, not tax-driven transactions.
Dissect helps allocate amounts, while Tax Adjustment ensures manual tax entries are properly reported.