# Account for taxes

*/Processes/Account_for_taxes*

Managing the organization's financial accounts for the purpose of taxation. Prepare and maintain the tax paid by the organization to the country they have business in.

## Digital Scalar

**Band**: digital
**Digital**: 0.9
**Rationale**: With no child occupations seeded, this scalar is derived from the PCF lens ('Manage taxes', a subset of financial resources) and the process description (managing financial accounts and preparing tax records). Because accounting and taxation are pure knowledge work centered entirely on information transformation, the focus sits firmly in the high digital band.

## Process Profile

**Outcome**: Tax liabilities are accurately calculated, recorded in the financial system, and statutory returns are filed and paid in compliance with regulations.
**Trigger**: The close of a financial reporting period or the approach of a statutory tax filing deadline initiates the tax accounting cycle.
**Key Steps**:
- Gather financial data and taxable transaction records
- Calculate current and deferred tax liabilities
- Record tax provisions and journal entries in the general ledger
- Prepare statutory tax returns and supporting schedules
- Remit tax payments to appropriate governmental authorities
- Reconcile tax accounts and retain compliance documentation
**Measured By**:
- [Tax Provision Accuracy](/Metrics/Tax_Provision_Accuracy)
- [Tax Return Cycle Time](/Metrics/Tax_Return_Cycle_Time)
- [Tax Compliance Cost](/Metrics/Tax_Compliance_Cost)
- [Tax Penalty Costs](/Metrics/Tax_Penalty_Costs)

## Boundary Of Firm

**Outsourced To**:
- [Tax Advisory Firm](/CompanyTypes/Tax_Advisory_Firm)
- [Accounting Firm](/CompanyTypes/Accounting_Firm)
**Automatability**: augmented
**Routing Summary**:
- Provision calculation, return preparation, and electronic filing are automated through tax provision and compliance software fed by the general ledger.
- Complex planning, controversy, and cross-border structuring are outsourced to a tax advisory firm.
- Tax position judgment and final review are kept in-house by tax managers.
**Delivered By Role**:
- [Tax Accountant](/Processes/Account_for_taxes/JobTypes/Tax_Accountant)
- [Tax Manager](/Processes/Account_for_taxes/JobTypes/Tax_Manager)
**Asset Specificity**: specific
**Automated By Action**:
- [Calculate Tax Provision](/Action/Calculate_Tax_Provision)
- [Prepare Tax Return](/Action/Prepare_Tax_Return)
- [File Tax Return](/Action/File_Tax_Return)
**Automated By Software**:
- [Tax Provision Software](/Software/Tax_Provision_Software)
- [Tax Compliance Platform](/Software/Tax_Compliance_Platform)
**Delivered By Department**:
- [Tax](/Processes/Account_for_taxes/Departments/Tax)
- [Finance](/Processes/Account_for_taxes/Departments/Finance)

## Neighborhood

### Parent

- [Process taxes](/Processes/Process_taxes) — parent · Processes

### Siblings

- [Perform tax planning/strategy](/Processes/Perform_tax_planning%2Fstrategy) — siblings · Processes
- [Prepare tax returns](/Processes/Prepare_tax_returns) — siblings · Processes
- [Prepare foreign taxes](/Processes/Prepare_foreign_taxes) — siblings · Processes
- [Calculate deferred taxes](/Processes/Calculate_deferred_taxes) — siblings · Processes
- [Monitor tax compliance](/Processes/Monitor_tax_compliance) — siblings · Processes
- [Address tax inquiries](/Processes/Address_tax_inquiries) — siblings · Processes

### Industries where this operates

- [Cut and Sew Apparel Manufacturing](/Industries/Cut_and_Sew_Apparel_Manufacturing) — operates in · Industries
- [Automobile and Light Duty Motor Vehicle Manufacturing](/Industries/Automobile_and_Light_Duty_Motor_Vehicle_Manufacturing) — operates in · Industries
- [Building Construction](/Industries/Building_Construction) — operates in · Industries
- [K-12 Education](/Industries/K-12_Education) — operates in · Industries
- [Food And Beverage Manufacturing](/Industries/Food_And_Beverage_Manufacturing) — operates in · Industries
- [Truck Body and Trailer Manufacturing](/Industries/Truck_Body_and_Trailer_Manufacturing) — operates in · Industries
- [Automotive Parts Manufacturing](/Industries/Automotive_Parts_Manufacturing) — operates in · Industries
- [Audio And Video Equipment Manufacturing](/Industries/Audio_And_Video_Equipment_Manufacturing) — operates in · Industries
- [Ship Building and Repairing](/Industries/Ship_Building_and_Repairing) — operates in · Industries
- [Direct Life, Health, and Medical Insurance Carriers](/Industries/Direct_Life,_Health,_and_Medical_Insurance_Carriers) — operates in · Industries
- [All Other Schools and Instruction](/Industries/All_Other_Schools_and_Instruction) — operates in · Industries
- [Direct Insurance (except Life, Health, and Medical) Carriers](/Industries/Direct_Insurance_(except_Life,_Health,_and_Medical)_Carriers) — operates in · Industries
- [Textile Industry](/Industries/Textile_Industry) — operates in · Industries
- [Motor Vehicle Dealers](/Industries/Motor_Vehicle_Dealers) — operates in · Industries
- [Chemical Industry](/Industries/Chemical_Industry) — operates in · Industries
- [Hospitals and Health Care Facilities](/Industries/Hospitals_and_Health_Care_Facilities) — operates in · Industries
- [Other Services (except Public Administration)](/Industries/Other_Services_(except_Public_Administration)) — operates in · Industries
- [Other Transportation Equipment Manufacturing](/Industries/Other_Transportation_Equipment_Manufacturing) — operates in · Industries
- [Paper Manufacturing](/Industries/Paper_Manufacturing) — operates in · Industries
- [Petroleum Refineries](/Industries/Petroleum_Refineries) — operates in · Industries
- [Petroleum and Petroleum Products Merchant Wholesalers](/Industries/Petroleum_and_Petroleum_Products_Merchant_Wholesalers) — operates in · Industries
- [Pharmaceutical and Medicine Manufacturing](/Industries/Pharmaceutical_and_Medicine_Manufacturing) — operates in · Industries
- [Professional, Scientific, and Technical Services](/Industries/Professional,_Scientific,_and_Technical_Services) — operates in · Industries
- [Public Administration](/Industries/Public_Administration) — operates in · Industries
- [Radio and Television Broadcasting Stations](/Industries/Radio_and_Television_Broadcasting_Stations) — operates in · Industries
- [Real Estate and Rental and Leasing](/Industries/Real_Estate_and_Rental_and_Leasing) — operates in · Industries
- [Retail Trade](/Industries/Retail_Trade) — operates in · Industries
- [Scheduled Air Transportation](/Industries/Scheduled_Air_Transportation) — operates in · Industries
- [Scientific Research and Development Services](/Industries/Scientific_Research_and_Development_Services) — operates in · Industries
- [Support Activities for Mining](/Industries/Support_Activities_for_Mining) — operates in · Industries
- [Technical and Trade Schools](/Industries/Technical_and_Trade_Schools) — operates in · Industries
- [Textile Product Mills](/Industries/Textile_Product_Mills) — operates in · Industries
- [Transportation and Warehousing](/Industries/Transportation_and_Warehousing) — operates in · Industries
- [Utilities](/Industries/Utilities) — operates in · Industries
- [Wholesale Trade](/Industries/Wholesale_Trade) — operates in · Industries
- [Semiconductor and Other Electronic Component Manufacturing](/Industries/Semiconductor_and_Other_Electronic_Component_Manufacturing) — operates in · Industries
- [Accommodation and Food Services](/Industries/Accommodation_and_Food_Services) — operates in · Industries
- [Activities Related to Credit Intermediation](/Industries/Activities_Related_to_Credit_Intermediation) — operates in · Industries
- [Administrative and Support and Waste Management and Remediation Services](/Industries/Administrative_and_Support_and_Waste_Management_and_Remediation_Services) — operates in · Industries
- [Aerospace Product and Parts Manufacturing](/Industries/Aerospace_Product_and_Parts_Manufacturing) — operates in · Industries
- [Agriculture, Forestry, Fishing and Hunting](/Industries/Agriculture,_Forestry,_Fishing_and_Hunting) — operates in · Industries
- [Ambulatory Health Care Services](/Industries/Ambulatory_Health_Care_Services) — operates in · Industries
- [Arts, Entertainment, and Recreation](/Industries/Arts,_Entertainment,_and_Recreation) — operates in · Industries
- [Automotive Parts, Accessories, and Tire Retailers](/Industries/Automotive_Parts,_Accessories,_and_Tire_Retailers) — operates in · Industries
- [Beverage and Tobacco Product Manufacturing](/Industries/Beverage_and_Tobacco_Product_Manufacturing) — operates in · Industries
- [Business Schools and Computer and Management Training](/Industries/Business_Schools_and_Computer_and_Management_Training) — operates in · Industries
- [Colleges, Universities, and Professional Schools](/Industries/Colleges,_Universities,_and_Professional_Schools) — operates in · Industries
- [Communications Equipment Manufacturing](/Industries/Communications_Equipment_Manufacturing) — operates in · Industries
- [Computer and Peripheral Equipment Manufacturing](/Industries/Computer_and_Peripheral_Equipment_Manufacturing) — operates in · Industries
- [Depository Credit Intermediation](/Industries/Depository_Credit_Intermediation) — operates in · Industries
- [Educational Services](/Industries/Educational_Services) — operates in · Industries
- [Educational Support Services](/Industries/Educational_Support_Services) — operates in · Industries
- [Electric Power Generation, Transmission and Distribution](/Industries/Electric_Power_Generation,_Transmission_and_Distribution) — operates in · Industries
- [Electronics and Appliance Retailers](/Industries/Electronics_and_Appliance_Retailers) — operates in · Industries
- [Executive, Legislative, and Other General Government Support](/Industries/Executive,_Legislative,_and_Other_General_Government_Support) — operates in · Industries
- [Finance and Insurance](/Industries/Finance_and_Insurance) — operates in · Industries
- [Health Care and Social Assistance](/Industries/Health_Care_and_Social_Assistance) — operates in · Industries
- [Information](/Industries/Information) — operates in · Industries
- [Junior Colleges](/Industries/Junior_Colleges) — operates in · Industries
- [Leather and Allied Product Manufacturing](/Industries/Leather_and_Allied_Product_Manufacturing) — operates in · Industries
- [Management of Companies and Enterprises](/Industries/Management_of_Companies_and_Enterprises) — operates in · Industries
- [Manufacturing](/Industries/Manufacturing) — operates in · Industries
- [Manufacturing and Reproducing Magnetic and Optical Media](/Industries/Manufacturing_and_Reproducing_Magnetic_and_Optical_Media) — operates in · Industries
- [Media Streaming Distribution Services, Social Networks, and Other Media Networks and Content Providers](/Industries/Media_Streaming_Distribution_Services,_Social_Networks,_and_Other_Media_Networks_and_Content_Providers) — operates in · Industries
- [Medical Equipment and Supplies Manufacturing](/Industries/Medical_Equipment_and_Supplies_Manufacturing) — operates in · Industries
- [Medical and Diagnostic Laboratories](/Industries/Medical_and_Diagnostic_Laboratories) — operates in · Industries
- [Mining, Quarrying, and Oil and Gas Extraction](/Industries/Mining,_Quarrying,_and_Oil_and_Gas_Extraction) — operates in · Industries
- [Monetary Authorities-Central Bank](/Industries/Monetary_Authorities-Central_Bank) — operates in · Industries
- [Navigational, Measuring, Electromedical, and Control Instruments Manufacturing](/Industries/Navigational,_Measuring,_Electromedical,_and_Control_Instruments_Manufacturing) — operates in · Industries
- [Nondepository Credit Intermediation](/Industries/Nondepository_Credit_Intermediation) — operates in · Industries
- [Nursing and Residential Care Facilities](/Industries/Nursing_and_Residential_Care_Facilities) — operates in · Industries
- [Oil and Gas Extraction](/Industries/Oil_and_Gas_Extraction) — operates in · Industries
- [Other Motor Vehicle Dealers](/Industries/Other_Motor_Vehicle_Dealers) — operates in · Industries

### Problems this exposes

- [ASC 740 deferred tax provision schedules drifting out of sync with the trial balance](/Problems/ASC_740_deferred_tax_provision_schedules_drifting_out_of_sync_with_the_trial_balance) — exposes problem · Problems
- [apportioning multistate income with differing state apportionment formulas and throwback rules](/Problems/apportioning_multistate_income_with_differing_state_apportionment_formulas_and_throwback_rules) — exposes problem · Problems
- [chasing missing or mismatched 1099/W-2 source docs before the filing deadline](/Problems/chasing_missing_or_mismatched_1099%2FW-2_source_docs_before_the_filing_deadline) — exposes problem · Problems
- [estimated quarterly payment calculations off safe-harbor causing under/overpayment penalties](/Problems/estimated_quarterly_payment_calculations_off_safe-harbor_causing_under%2Foverpayment_penalties) — exposes problem · Problems
- [fixed-asset register and depreciation schedules diverging from the tax basis ledger](/Problems/fixed-asset_register_and_depreciation_schedules_diverging_from_the_tax_basis_ledger) — exposes problem · Problems
- [mapping GL accounts to tax-form line items (Schedule C, Form 1120) re-done every filing season](/Problems/mapping_GL_accounts_to_tax-form_line_items_(Schedule_C,_Form_1120)_re-done_every_filing_season) — exposes problem · Problems
- [reconciling book-to-tax differences (depreciation, accruals, M-1/M-3 adjustments) by hand each close](/Problems/reconciling_book-to-tax_differences_(depreciation,_accruals,_M-1%2FM-3_adjustments)_by_hand_each_close) — exposes problem · Problems
- [responding to IRS/state notices by manually re-deriving the original return positions](/Problems/responding_to_IRS%2Fstate_notices_by_manually_re-deriving_the_original_return_positions) — exposes problem · Problems
- [sales-tax rate and taxability lookups per jurisdiction/SKU going stale between rate changes](/Problems/sales-tax_rate_and_taxability_lookups_per_jurisdiction%2FSKU_going_stale_between_rate_changes) — exposes problem · Problems
- [tracking nexus across states as remote sales cross economic-nexus thresholds post-Wayfair](/Problems/tracking_nexus_across_states_as_remote_sales_cross_economic-nexus_thresholds_post-Wayfair) — exposes problem · Problems
- [Building The Tax Provision From A Book Close That Keeps Moving](/Problems/Building_The_Tax_Provision_From_A_Book_Close_That_Keeps_Moving) — exposes problem · Problems

### Automated by

- [Tax Compliance Platform](/Software/Tax_Compliance_Platform) — automated by · Software
- [Tax Provision Software](/Software/Tax_Provision_Software) — automated by · Software
- [File Tax Return](/Activities/File_Tax_Return) — automated by · Activities
- [Prepare Tax Return](/Activities/Prepare_Tax_Return) — automated by · Activities
- [Calculate Tax Provision](/Activities/Calculate_Tax_Provision) — automated by · Activities

### Outsourced to

- [Accounting Firm](/CompanyTypes/Accounting_Firm) — outsourced to · CompanyTypes
- [Tax Advisory Firm](/CompanyTypes/Tax_Advisory_Firm) — outsourced to · CompanyTypes

### Delivered by

- [Tax Manager](/JobTypes/Tax_Manager) — delivered by · JobTypes
- [Tax Accountant](/JobTypes/Tax_Accountant) — delivered by · JobTypes
- [Finance](/Departments/Finance) — delivered by · Departments
- [Tax](/Departments/Tax) — delivered by · Departments