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Hi all,
I am working on an S-Corp Tax Return and I run into an issue: I have a difference between Schedule M-1, Line 8 and Schedule K, Line18, how can we make an adjustment to clear the issue.
Thank you
Mo
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What amount are you talking ? $1 or $100,000 makes a big difference
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difference of $7545, my Computed net income per books is off (higher)
thx
Mo
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Here are some suggestions.
1) Verify all income/expenses have been entered by reconciling the P&L with page 1, line 21. by adding/subtracting items that will be included on Schedule K For example Sec179 depreciation, interest income, 50% meals, contributions, etc
2) Are there shareholder distributions? If yes, were they entered on Schedule K
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I did and I found out that there was a Health Insurance - Owner's in P&L not added to the Tax return. I did not included it because I thought that it shouldn't be included there as an expense. also I had to add it to the schedule K1 TO BALANCE it.
The other issue I had was the balance sheet, Assets vs Liability, So I had a difference of about 51,000
so I adjusted it using shareholder adjustment for that amount ot balance BS, What do you think?
NB: My balance sheet accounting is balanced.
Mo.
