Hello, to all. Hope you're headed into a good weekend, but need to get some input from great experts.
I've never seen anything like it in Turbotax Business, in which the 2020 year. While working on tax, an error in filling the forms have described: "Form 1120S p3-5: End of year balance sheet is out of balance. Each of year total assets must equal end of year total liabilities and shareholders' equity."
I'm terrified and need a description to know where to go and what to fix. Since I've worked Turbotax for two years now, a bit lost. (Probably not the only one!) Quite disturbing.
Thanks in advance for experts! 😊 (For help!) (Again, I need to know where and what to do about the "end of year balance sheet--out of balance.")
You are absolutely going to have to provide more details with respect to your accounts (on Schedule L) and the figures in order to get a reasonable answer.
I will page someone who is thoroughly familiar with this area in the meantime.
I concur with @Anonymous_ in that based on the current limited facts, we can't provide much assistance.
Keep in mind that the balance sheet is something that each user needs to manually input.
Where you are most likely having issues is that your book to tax reconciliation is not accurate.
As noted by @Anonymous_ we need to understand exactly which account is out of balance.
Does your retained earnings roll correctly if you start with prior year RE, adjust for current year income or loss on line 1 of Sch M-1?
Nothing to be terrified about. Business tax returns can be difficult.
I do, however, like for people to answer questions! Thanks for that and figured something else.
Hope you have a great rest of weekend!
Would you mind sharing your solution. I am having the same issue! Thanks in advance.
I've had a similar problem with a client's 1120S. I changed an expense amount to correct a known imbalance. The change is reflected in the expenses on Page 1 and on Line 21 Ordinary Income, and carries thru to Sch K Line 18. But Net Income per Books on Sch M-1 did not change, nor did Retained Earnings on the Balance Sheet, leaving it out of balance. There seems to be a disconnect in the M-1 and M-2 Smart Reports. I've tried re-installing the program, after two hours on the phone with half a dozen different TT reps. No luck. Now its on to over-rides. I hope I don't end up 'pushing a rope' from one imbalance to another.
I have found the answer to my question. On the Schedule M-1 Smart Worksheet: On Line F, "Use amount on line E [computed net income per books] for Schedule M-1, line 1?" the box was checked "No." This threw everything out of balance. My client does not remember clicking the box and he does not have time to set up another return and see what the default setting is. Others might want to check.
@DS1956 wrote:
On the Schedule M-1 Smart Worksheet: On Line F, "Use amount on line E [computed net income per books] for Schedule M-1, line 1?" the box was checked "No." This threw everything out of balance. My client does not remember clicking the box and he does not have time to set up another return and see what the default setting is. Others might want to check.
I have done a number of test returns and the default appears to be "Yes".