Tax Reconciliation entries (examples)

Alerts and notices
Leave feedback

Internal Employees: Submit feedback

Contact information (optional):

Leave this blank:

Please tell us how we can make this information more helpful.


Characters left:

Important reminder!

Licenses for Payroll CS, Trial Balance CS, and Write-Up CS (but not Engagement CS) permanently expired on March 1, 2017. CSA will not include 2017 tax rates or payroll forms, so, for 2017 and beyond, you will need to process payroll in another application. We recommend Accounting CS Payroll and myPay Solutions. For more information, see the following topics.

The following examples describe common tax reconciliation entries.

Example 1

Federal Income Taxes (1120 entity type): Accounts for federal income taxes can be coded to tax code 205. This tax code is adjusted for the amount of federal income taxes in the Federal income taxes per books tab with an offset to the applicable M-1 tax code.

Example 2

Penalties (1120 entity type): Accounts for penalties can be coded to the tax code for other deductions. This tax code is adjusted for the amount of penalties in the Book expenses not on return tab with an offset to the applicable M-1 tax code.

Example 3

The balance sheet account Allowance for bad debts decreased by $10,000.00 during the tax year. An additional $10,000.00 in bad debt expense needs to be recorded on the tax return. The tax code for bad debts is adjusted in the Tax deductions not on books tab by $10,000.00 with an offset to the applicable M-1 tax code.

Example 4

Accounts for depreciation, amortization, depletion, organization or start-up costs, Section 179 expense, and 4797 gain/loss can be coded to the associated tax code.

Creative Solutions Accounting treats the following tax codes as income statement tax codes for the following entity types:

CSA tax codes as income statement tax codes for: 1120 1120S 1065
207 1120S, L14a-Book depr-other than COGS 1065, L16a-Book depreciation
208 1120, L20a-Book depr-other than COGS 1120S, L15-Page 1 depletion - book
209 1120, L21-Page 1 depletion - book
214 1120S, L19-Total book amortization 1065, L20-Book amortization
215 1120, L26-Total book amortization Sch M1, L4-Start-up > org costs - book
217 1120, L21-Page 1 depln other than oil/gas
218 Sch M1, L5-Org > start-up book expense Sch M1, L3-Org > start-up book expense
228 Sch M1, var-Book section 179 amount Sch M1, var-Section 179 expense - book
283 Sch A, L5-Book depreciation - COGS Sch A, L5-Book depreciation - COGS
488 Sch M1, var-4797 gain/loss - book
489 Sch M1, var-4797 gain/loss - book

The tax codes listed above are increased or decreased in the appropriate tab in the Tax Reconciliation window with the offset applied to the applicable M-1 code. UltraTax CS users should exclude any tax reconciliation entries from being included in the tax export because the M-1 adjustment and tax amounts are typically calculated automatically based on information in asset module.

Alternately, if accounts are coded with tax code 88888 so the accounts are not sent to UltraTax CS, tax code 88888 should be adjusted for the book-to-tax difference in the Tax Reconciliation window.

Tax depreciation is $20,000.00 greater than book depreciation. The tax code for depreciation is adjusted in the Tax deductions not on books tab by $20,000.00 with an offset to the applicable M-1 tax code. This entry is marked as exclude so it is not sent to UltraTax CS as part of the tax export.

See also:Tax Reconciliation (1120, 1120S, and 1065)

Top of page

Share This