Hi - I am filing form 1120. In 2020 I received federal income taxes I paid for 2019. I know it is not taxable income. But, how do I account for this refund on form1120 so everything ties in? In QBD I have entered a refund for Federal Income Tax as an Expense account.
Any help will be appreciated.
Andy
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Thank you for your help. Somehow it nudged me to the right solution. I just read in TurboTax's fine print "Note: for best results, we recommend you enter data on Schedule M-1 or on the worksheet, but not both. " I deleted the worksheet and entered data directly on the schedules. It's all fine now.
federal tax refunds are not entered anywhere on a federal income tax return unless they're going to be distributed at some time on K-1s and C corps don't issue those.
Thank you for your reply. This is not about distribution. I am trying to do the Income Reconciliation, Retained Earnings, and Balance Sheet in TurboTax to file my 1120. I had a $2000 Federal Income Tax refund on my 2019 form 1120. I am trying to enter this refund as either -$2000 or +$2000 and neither works. Entering it as -2000 fixes the Income Reconciliation, but messes up Retained Earning. Entering it as +2000 does vice versa.
Thanks.
If you're doing a balance sheet you need to put the cash back in so debit your cash account.
Thank you for your help. Somehow it nudged me to the right solution. I just read in TurboTax's fine print "Note: for best results, we recommend you enter data on Schedule M-1 or on the worksheet, but not both. " I deleted the worksheet and entered data directly on the schedules. It's all fine now.
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