Because you reported a future payment on your prior year return, you have a book-to-tax timing difference this year. Making this adjustment should bring your balance sheet into balance.
Add the amount of the prior year contribution on the Schedule M-1 Worksheet under Timing (temporary) items, Other timing expense items. You will need to make this adjustment each year you report SEP contributions for the prior year.
To enter this adjustment:
- Click on the Forms icon in the TurboTax Business header.
- Find "Sch M-1 Wks" in the left column and click the form name to open it in the large window.
- Scroll down to the bottom of the form and look for "Other timing expense items" under the "Book Depreciation..." box.
- Type in "SEP Contribution for 2022" on the yellow line.
- Enter the amount reported last year in the first column and "0" in the second column.
- Open Form 1120S p3-5 and review Schedule L to confirm your balance sheet is in balance.
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