Tax Year Prior to 2020: Can I file an out of balance M-1? Getting an error message saying my M-1 is out of balance with Schedule K, line 18.

[jletts]

 The amount that's out of balance is the EXACT amount of the non-deductible meals. Can I leave it as is? If not, how do I go about correcting it?

[MichaelMc]

This is a very simple fix. You have an expense (the full amount of meals) recorded on your books, that is not deducted on your tax return. And you have a deduction on your return (the deductible cost of meals) that is not recorded on your books.

Enter these two amounts on the appropriate lines of M-1 and the imbalance will be resolved. Use Line 5 for the full amount of meals. Use Line 8 for the deductible cost of meals.

[HydroSci]

Husband wife LLC.  We file 1065 and CA 568.  TT wants the disregarded entity box checked.  Googling I see that CA is a community property state.  So do I check the disregarded entity box? My CPAs in the past did not (but I now think that is incorrect because they also told me that I am a disregarded entity).

Also, can I change profit percentages between years (e.g., 50/50 to 80/20 to 30/70 etc.)?

Next, I find that CA 568 M-1 is out of balance by $800 (the amount of the LLC tax).   I suspect that this stems from the state tax being deductible on the 1065 and not on the 568, and the inclusion of the LLC tax on line 4b of the 568 M-1.  Thoughts on how to fix this? 

[dillarj]

Can you clarify this answer? I am having the same M1 issue due to business meals, but when I look at the worksheet, your answer doesn’t seem to make sense. 

[VictorW9]

The M1 is just a reconciliation between Book income and Tax income. It shouldn't matter as much so long as your M2 is not giving any error messages.

[Anonymous]

Every year I have trouble with the M-1 in my 1065P return.  Our return is straight forward but the M1 part causes errors.  Is there a button to disable that calculation?  We simply have gross income less expenses and depreciation.  

Any and all help welcome at this point.?.?

[ReneeM7122]

Yes, you can disable the M-1 of your gross receipts are less than $250,000.

Here is how to do it:

How do I view and delete forms in TurboTax Online?

• Open or continue your return in TurboTax.
• In the left menu, select Tax Tools and then Tools.
• In the pop-up window Tool Center, choose Delete a form.
• Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

@Dtown1

[ckluth]

I'm trying to delete form M1- and it keeps reappearing and I can't file.

Any help?

[Anonymous]

I will have to look into this for the current year?  What platform are you using?

[PatriciaV]

Yes, you can skip the balance sheet and related Schedules M-1 and M-2 if all of the following are true:

• Total business income (before deductions) is less than $250,000, and
• Your business isn't filing an Alabama, Connecticut (non-partnership), District of Columbia, Georgia, Kentucky, Louisiana, Massachusetts, Mississippi, New Jersey (non-partnership), New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, or Tennessee return, and
• Corporation/S corporation year-end assets are less than $250,000 or partnership/LLC year-end assets are less than $1,000,000.

The steps necessary to turn off the balance sheet depend on the type of business return you are filing. Please see this TurboTax article for instructions specific to your tax situation: How do I turn off the balance sheet?