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Book vs Tax Return
Why is Turbo Tax telling me my book income is different from what in inputted?
Anonymous_Answer
Level 15
September 15, 2020
I can only presume that you are using TurboTax Business and are in the process of preparing an income tax return for an entity (e.g., 1120, 1120-S, 1065).
Regardless, you need to reconcile the book and tax differences, for which there is a screen in the program.
Also, review the On Demand Tax Guidance (reproduced below).
Book income or loss is usually derived from a profit and loss statement for the company. If the company does not prepare a profit and loss statement, the book income and loss is a summary of all of the book income and expense accounts.
Book income and or loss is reduced or increased by a federal income tax expense accrual.
Book income and expense accounts do not include asset and liability accounts. Those accounts are referred to as Balance Sheet accounts.
Books refers to anything used to track accounting information using your accounting method, to make entries for and complete the company's tax return.
Some common books are:
- QuickBooks or other accounting software
- Excel spreadsheet
- General ledger and trial balance
