Previous year SEP IRA

[redmeat]

I contributed to a SEP IRA for 2022 in 2023,  Where do I input this on TurboTax business so it does not affect my balance sheet in 2023?

[Anonymous_]

I'll page @dmertz

[dmertz]

This question has been addressed before somewhere in this forum but I don't recall the answer, so I can't be of much help.  It seems like a 2023 expense.

[redmeat]

Can anyone else help me?

[dmertz]

This might be the post I'm remembering:

https://ttlc.intuit.com/community/business-taxes/discussion/how-are-sep-contributions-reported-for-a...

[redmeat]

Thanks but still trying to figure this out.. My balance sheet is off because the contribution made for sep ira through the LLC was made on 2/23 for the 2022 taxes.  I see the contribution listed in my 2022 tax return when I transferred that year over.  I see where the LLC can calculate and contribute now (2024) for 2023.  But I can't figure out how to adjust my balance sheet for the payment made in 2023 for the 2022 contribution.   Thanks

[PatriciaV]

Because you reported a future payment on your prior year return, you have a book-to-tax timing difference this year. Making this adjustment should bring your balance sheet into balance.

Add the amount of the prior year contribution on the Schedule M-1 Worksheet under Timing (temporary) items, Other timing expense items. You will need to make this adjustment each year you report SEP contributions for the prior year.

To enter this adjustment:

1. Click on the Forms icon in the TurboTax Business header.
2. Find "Sch M-1 Wks" in the left column and click the form name to open it in the large window.
3. Scroll down to the bottom of the form and look for "Other timing expense items" under the "Book Depreciation..." box.
4. Type in "SEP Contribution for 2022" on the yellow line.
5. Enter the amount reported last year in the first column and "0" in the second column.
6. Open Form 1120S p3-5 and review Schedule L to confirm your balance sheet is in balance.

[redmeat]

I appreciate you taking the time to answer.  Unfortunately that does not change the balance sheet.  You refered to form 1120S I am filling out the balance sheet for form 1065 for my LLC not sure if that matters.  Just to be clear when you say first column you mean "Per Tax Return (schedule K) and the second column is "Per Books".  Thanks for your help

[ThomasM125]

In 2022 you should have made an entry on your books to debit pension expense and credit pension contribution payable. Then when you paid the amount in 2023 you would debit the pension contribution payable and credit cash and your balance sheet would not need an adjustment in TurboTax.

I suggest you adjust your 2022 balance sheet on  schedule L to show the pension contribution payable amount in line 17, current liabilities, and see if that helps you. For your 2023 contribution, you would show that amount in line 17 in the 2023 column. 

[redmeat]

Can you help with this PatriciaV?  thanks

[PatriciaV]

The entries are basically the same on a 1065 Partnership return. On Sch M-1 Wks (accessed from Form 1065 p5-6), under Timing (temporary) items, Enter the amount reported last year in the first column (Per Books) and "0" in the second column (Per Tax Return).

This timing adjustment should increase your net income for the current year, which flows to your balance sheet through the Partners' capital accounts.

@redmeat 

[redmeat]

Thanks.. but that does not change my ending balance sheet.

[redmeat]

@PatriciaV 

What does work if I input the previous year's SEP contribution to the "other permanent items (expenses) inn the "Per Books" column.  Should I just leave it there?

[PatriciaV]

Yes, you can report that activity under Permanent Differences per books.

@redmeat