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Level 1

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.

 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?

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Level 1

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.

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.

2 Replies
Highlighted
Level 1

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.

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.

Level 5

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.

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?