PASLLC7154
Level 1
03-05-2020
12:25 PM
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How is the payment for Federal taxes on a C-Corp accounted for? I know it can not be deducted but if they pay for it out of the business what is the offset in terms of accounting for it?
mdavolio
Employee
03-05-2020
03:12 PM
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Hi,
1) Credit to cash, debit an expense account, such as federal tax expense, but it's a book/tax difference.
2) If accrual based, you usually have a liability account that has been created before the payment is made.
Thank you,
Mike