How to Upload Your Profit and Loss to Create an IR10 with IRD

This tax season, you can simplify how you report your business finances. The IR10 is a key document for contractors and freelancers that summarizes your income and expenses for the IRD. While manually entering this information into myIR can be a tedious process prone to errors, there is an easier way.

You can prepare your Profit and Loss (P&L) statement in a specific format and upload it directly to generate your IR10. Once you get the hang of it, this method can save you significant time and hassle.

What is the IR10?

The IR10 is not your entire tax return. Think of it as a summary appendix for your business activities that you attach to your main return. In essence, it shows how much money your business earned and what it spent, with the bottom line being your net profit or loss.

• Sole traders attach the IR10 to their individual tax return (IR3).
• Partnerships attach it to their partnership return (IR7).

The upload feature simply automates the process of filling out this form.

Preparing Your P&L for Upload

This is the most critical part of the process. The IRD system is particular about the data format, so you cannot upload just any spreadsheet.

Most accounting software like Xero, MYOB, or Wave can generate a P&L report for you. You can also use tools like Excel or Google Sheets. The key is to ensure your final file contains the right information and is saved in the correct format.

1. Create Your P&L Report: You need a comprehensive and accurate P&L report for the financial year (April 1 to March 31 for most). This report should list all income sources and include a detailed breakdown of all business expenses (e.g., rent, vehicle expenses, office supplies, ACC levies).

2. Save as a CSV File: The IRD system only accepts one file type: CSV (Comma Separated Values). This is a plain text format. When using Excel or Google Sheets, choose "Save As" or "Download" and select CSV as the file type.

3. Use the Right Columns: Your CSV file must have three specific columns with the following headers in the first row.

Required CSV Columns

• Account: This column is for your internal account codes (e.g., '400' for sales, '650' for rent). If you don't use codes, you can leave this column blank, but the "Account" header must still be present.
• Description: This is the name of the income or expense category (e.g., "Sales Revenue," "Consulting Fees," "Vehicle Expenses," or "Office Rent").
• Amount: This is the total amount for the financial year. Do not include dollar signs or commas. Use positive numbers for income and negative numbers for expenses (e.g., -1500.50). If you list expenses as positive numbers, they will be incorrectly treated as income.

Here is an example of a correctly formatted CSV file:

Account,Description,Amount
400,Sales,75000
410,Other Revenue,2500
620,Rent,-18000
645,Vehicle Expenses,-4500
660,ACC Levies,-2100

Important: Always double-check the IRD website for the latest templates or guidance, as requirements can change.

Step-by-Step Upload Guide

Once your CSV file is ready, the upload process is straightforward.

1. Log in to your myIR account on the IRD website.
2. Navigate to the income tax return you are filing for the year.
3. Proceed through the return until you reach the section for business income, where you will find the IR10 summary.
4. Look for an option like "Import financial statement" or "Upload file" and click it.
5. A dialog box will appear. Select the CSV file you prepared from your computer and begin the upload.
6. The system will process the file. If the format is correct, it will automatically import your data.
7. Next, you will see a mapping screen. The system will attempt to match your descriptions (e.g., "Vehicle Expenses") with standard IRD expense categories. Review these matches and use the dropdown menus to manually assign any accounts the system could not categorize.
8. Carefully review all the imported figures. Ensure the total income and total expenses match your original P&L report. This is your final chance to catch any errors.
9. Once you are satisfied, save the IR10 section and continue with the rest of your tax return.

Troubleshooting Common Issues

Sometimes things don't go perfectly on the first try. Here are some common problems and their solutions:

• "File type incorrect" error: This usually means you did not save your file as a .csv. Return to your spreadsheet software and use the "Save As" or "Export" function to create a CSV file.
• "Column headers not found" error: Check that your column headers are in the first row and spelled exactly as required: Account, Description, and Amount.
• Incorrect totals: This often happens if you forget to use a minus sign (-) for your expense amounts. The system will add them to your income instead of subtracting them. Correct the signs in your CSV file and re-upload.
• System can't map accounts: If the IRD system fails to automatically categorize an income or expense item, simply select the correct category manually from the dropdown list on the mapping screen.

Taking a few minutes to set up your P&L file correctly can turn a tedious data entry session into a quick upload. While it may feel awkward the first time, mastering this process is a handy skill that can make tax time significantly less stressful.