Non Deductible Expenses

[Kim20201]

Hello,

In working with Turbo Tax Business, I see that my book profits are different than the return which is common.  In my case the difference is penalties, the 50% overage not allowed on business meals and the overage on business gifts (amount of gifts over $25 that are not deductible). Turbo Tax walked me through trying to reconcile the difference and it showed correctly categories to fill in for Penalties that were are not deductible and the 50% overage for Business Meals.  I didn't see however a place to enter any other non deductible items (which in my case was the gift amounts over $25) so that my books will match.  How do I accomplish this?

[Anonymous_ · Accepted solution]

You might want to try using Forms Mode and enter items directly on your balance sheet.

[EdNC]

The program does not have a direct entry for non-deductible fines and penalties. There is a work around for this. Enter all expenses in the Deductions section except for the Non-Deductible one(s). The program will report that the Income Statement reports a different amount.  At this point enter the correct Net Income from the accounting  book Income Statement records. The program will then proceed to resolve the difference. At the next screen, Book and Tax Differences, check the box for Penalties (if the non-deductible expense is a penalty/fine). The next screen will ask for Other Fines and Penalties. Enter the amount for the penalties/fines. The program will then report the correct amount for Tax Net Income. The penalties/fines will be in the correct place on the 1065 and on the K-1's with the correct code.