PASLLC7154
Level 1

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? 

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mdavolio
Employee
Employee

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
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