Turbotax Business -- how to enter something on Schedule M-1 Line 6??

[fxf]

I have a book/tax difference. Namely, last year a tenant paid January rent in December. Because I included this income on my business taxes in 2021, I need to subtract it from my tax return in 2022.

I see the Schedule M-1 worksheet, but when I enter income timing differences it shows up on M-1 line 2.

I'm trying to report income that is on my books, but will *not* be on Schedule K.

[Anonymous_]

I will page @Rick19744 for input on this issue.

[PatriciaV · Accepted solution]

An income timing difference is entered on the Sch M-1 worksheet in the first section under Income Items. Enter the per Book income and the per Tax Return amount so TurboTax can calculate the difference. In your case, you want to reduce Tax income by the rent that was reported last year.

Entering the difference in this way will allow the adjustment to flow to Form 1064 p4-5 Sch M-1 Line 6 on a separate line under Tax-exempt interest with the description you entered above.

[Rick19744]

Hopefully the  guidance provided by @PatriciaV addresses your issue.

The bigger issue I see is why are you complicating your record keeping?

I'm just surprised that your books and records are different than how they are reported on your tax return.

[fxf]

Thank you!

[fxf]

@Rick19744

 This is my first year self-preparing my taxes with Turbotax. My previous tax preparer  did my taxes while I did the books. She therefore treated prepaid rent (properly) as current year income, whereas in my books, I didn't book the income until the following year. I am now maintaining my books exactly like my taxes, but I have to deal with this one situation where my books will still have a difference vs. the taxes. Next year, everything should be perfect!

[Rick19744]

Got it.  Makes sense.