How to add a footnote for balance sheet changes not impacting P/L? Is there a way to show state tax paid statement for Ln. 12 of Form 1065?

Forum|Forum|6 years ago
May 2, 2020
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IRonMaN

Level 15

Debits equal credits and typically an entry on the balance sheet will affect the income statement. What do you have going on?

Slava Ukraini!

S

singhtaxservicesAuthor

Level 2

The predecessor accountant incorrectly recorded the loan as receivable instead of payable while the equity was off by the difference. So, instead of amending the tax return for balance sheet changes, I was hoping to add a footnote in the tax return providing a reasoning.

IRonMaN

Level 15

I'm not sure how someone can just accidently put something on the balance sheet as an asset when it should have been a liability. Did they "plug" income in order to make things balance?

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qbteachmt

Level 15

Are those two separate questions unrelated, or is this the same one topic?

Example: The State taxes that were paid are Personal, so that isn't gong to hit the P&L. Debit Partner Draw and Credit Bank for the spending.

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S

singhtaxservicesAuthor

Level 2

I wasn't how if more than one question can be added to the same request. The state tax expense question is totally separate from the balance sheet footnote.

I'm preparing a tax return for S-Corp. The taxes paid related to payroll, property tax, and income taxes. Instead of reporting a total sum figure of these expenses, can PTO generate a statement that separately state the expenses?

qbteachmt

Level 15

An S corp doesn't pay its own Federal Income or State Income taxes.

And since it is never a good idea to put Real Estate into an S Corp, is the Business Equipment Tax, not Real Estate property tax?

You don't report a total sum of these taxes. For instance, Payroll taxes are separate and not part of Property or Franchise taxes. The employer's share of taxes are part of Gross Payroll, and the employee share is never reported as Expense by the employer, since it's already part of gross wage expense.

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