Simple S-corp balance sheet

[GerritB]

I own a personal service S corp, the owner and only employee, for electronic engineering consulting.  My income and assets for 2019 have apparently pushed me into requiring a balance sheet for my corporate return, and it is not balancing.  I have no accounting background and the terms I see are complete gobbledegook to me. 

What is the simplest way to get my balance sheet to balance?  My accounting method is extremely simple: I just have a checking account.  The account balance at the beginning and end of the year aren't identical because cash is flowing in and out of it, but this seems to throw my balance sheet off.  What can I do to reconcile this?

[LudwigVan_fan]

There is not a real easy answer for your question.  The balance sheet is a reflection of the book balance sheet...not necessarily for tax.   Checking account balance obviously would not be the same for beginning and end of year.  What happens in your checking account is your cash flow (as you stated).  But the cash flow affects many other items.

You state you have assets of over $250,000 and income of over $250,000, or you wouldn't have to file the balance sheet.

I suggest you print off a copy of the balance sheet, and pencil in amounts on the various line items,  Note the dark blue lines are not to be filled in...the light blue is for entries.

https://www.irs.gov/pub/irs-pdf/f1120s.pdf

Instructions for 1120S

https://www.irs.gov/pub/irs-pdf/i1120s.pdf

The balance sheet is the product of various things, cash, net income, distributions, etc. 

You might want to consult a professional for the first time you do this...someone with accounting knowledge.

But, the simplest way is to get the asset side done first.  Those numbers (especially if you don't have a lot those items) should be fairly easily obtainable.  Note that this is book numbers...not necessarily tax unless book and tax are the same.

On the liabilities and SH equity side, lines 16 through 21 (if you have any) should be easy to fill in.  Capital Stock and additional paid in capital should reflect the money and/or assets you contributed  initially into the corporation to get your shares of stock.   Treasury stock would be a very unusual item, especially for a single SH company.  I'm guessing that would be zero.

That leaves retained earnings (line 24)  and adjustment to shareholder's equity (line 25); as the items that will fluctuate.

Hopefully this link works...to intuit community about 1120S balance sheet questions.

https://ttlc.intuit.com/community/forums/searchpage/tab/message?advanced=false&allow_punctuation=fal...

https://ttlc.intuit.com/community/business-taxes/discussion/balance-sheets/00/1203982

https://ttlc.intuit.com/community/using-turbotax/help/how-do-i-reconcile-my-balance-sheet-in-turbota...

https://ttlc.intuit.com/community/business-taxes/discussion/where-to-report-shareholder-distribution...

Good luck...this is very difficult to explain in a forum such as this and if you don't have some accounting/bookkeeping background.

Again, for this first year, you might want to consult a professional for help.

[GerritB]

I don't HAVE "books" -- I have a checking account which money flows into and out of, period.  There has got to be a simple way to enter a number in the TurboTax balance sheet to reconcile the difference between my beginning checking account balance and the ending balance.

The IRS form 1120S schedules L and M are even less comprehensible than TurboTax's balance sheet, and they generally don't resemble the entries I need to make in TurboTax.  I appreciate the time to send the links here, but they are no help.

Please, someone, there must be a simple and legitimate way to do this.

[GerritB]

I ended up entering figures on Sched L line 25 (Adjustments to shareholder equity) and line 18 (other current liabilities), using the Forms mode of TurboTax, to make my balances zero.  There is also a "retained earnings" entry on line 24 which seems like a reasonable way to handle differences in checkbook balances.