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Taxm0m22
Level 1

S-Corp profit

My husband is a general contractor and has an SCorp.  At the end of 2021 he had money left in his account.  Most of which is money for materials of a job still in progress.  However, Turbo Tax is counting that as profits, but it's not.  How do I clarify this on the return?

5 Replies
tagteam
Level 15

S-Corp profit

Are you using TurboTax Business to prepare an 1120-S?

 

Where are you entering the money left in the account? 

Critter-3
Level 15

S-Corp profit

Sorry but the program is correct ... if you are a cashed based accounting business ...  all profits on the books at the end of the year are taxed on the personal return thru the K-1 form even if the money is earmarked for supplies in the next tax year.     Next year the expense for the materials purchased will be reported on the 2022 return.  If you still have questions on how the 1120S is computed and/or  bookkeeping concepts please seek local professional assistance or do some reading on your own. 

tagteam
Level 15

S-Corp profit

@Critter-3 is correct; if the money in the account was the receipt of proceeds paid by the client, then it is reported as income, regardless of how it was used (or even if it was simply deposited into an account waiting to be deployed).

Taxm0m22
Level 1

S-Corp profit

Where it ask for beginning year account balance and end of year account balance

Critter-3
Level 15

S-Corp profit

Bank account balances have nothing to do with an income tax return so the program will not ask for that information.  You really need to talk to someone to be educated in the difference between bookkeeping concepts and the form 1120-S requirements.

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