I cannot reconcile my retained earnings correctly. Last years retained earnings were negative, and the software will not allow me to enter the correct number

breeduddy — Wed, 04 Feb 2026 08:01:03 GMT

Re: I cannot reconcile my retained earnings correctly. Last years retained earnings were negative, and the software will not allow me to enter the correct number

Mike9241 — Sat, 25 Oct 2025 03:26:45 GMT

see if this helps but it's difficult because sometimes major mistakes are made making it impossible to properly balance thing. is the opening balance sheet the same as last year's closing balance sheet?

for an S-Corp ending retained earnings (which because the prior year was negative can be different that what's shown for the AAA account

1) prior year negative balance

2a) if line 1 of schedule M-1 is positive reduce 1)

2b) if it's negative increase 1)

3) if there were distributions and the previous result is negative increase it. if positive reduce it.

basically, it's the same for a C-corp but you can look up distributions in schedule M-2 line 5

if you don't balance then it's likely something is wrong in other lines of the balance sheet. or the book profit/loss is wrong, or the distributions are wrong, or a combination

we have no access to your return or books or records.

if you still don't balance you may have to see a pro or see if Live is still available.

hopefully it's not an S-corp because the return is late even with an extension and you are incurring penalties each month late.

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I cannot reconcile my retained earnings correctly. Last years retained earnings were negative, and the software will not allow me to enter the correct number

Re: I cannot reconcile my retained earnings correctly. Last years retained earnings were negative, and the software will not allow me to enter the correct number