Re: how to get schedule L to balance?
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how to get schedule L to balance?

My 1120s Income Reconciliation Summary has a difference of $285 due to 50% undetectable meals. This is making the balance sheet not match. I spoke to 5 different TurboTax CPAs and none of them could give me any answers on how to correct the problem. Your help is appreciated.

2 Replies
Level 15

how to get schedule L to balance?

I cannot see your return (and, obviously, your balance sheet) but the difference the corporation spent that is not deductible for federal income tax purposes must still come from somewhere on the asset side, almost certainly out of cash (which would need to be reduced in the balance sheet section).

Not applicable

how to get schedule L to balance?

we can't see the return so we don't know what you did wrong.  there are many line items that must be entered directly in the worksheets so the flow to schedule L..  we don't know what assets and liabilities you have and schedule L has 25 lines other than totals.  the balances on it should be end of year.  

most common:

cash line 1 

buildings and related accumulated depreciation which should match up with form 4562 line 10

capital stock - what you told the state you were going to issue and the amount you put into the corp for it. line 25

retained earnings. (for new corps really the accumulated adjustment a/c which should match schedule M-2) line 😎 which is net profit (regardless of whether certain expenses weren't deductible) less distributions to shareholders.


hope you filed an extension because this return was due 3/15/2020 if extended 9/15/2020. penalties are about $200/mo /shareholder /month late.


even if you can figure it out you certainly should see a pro.  S-Corps and its shareholders have many laws that affect them. mess up and if the IRS catches it, you could regret it.   there are not only tax laws but other laws may be in play such as the need for workmen's comp insurance.  even if you are the only employee.  then there the ned to take a salary and file payroll tax returns. 




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