Retained Earnings Adjustment

Forum|Forum|4 years ago
March 13, 2022
1 reply
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Regarding the prior year retained earnings adjustment:

I made a prior year retained earnings adjustment as of 1/1/21 that pertains to 2020 in my books. My 2021 ending Retained earnings in TurboTax is off by this adjustment. Where can I enter this retained earnings adjustment into TurboTax so that my ending RE will match what is in my books?

TurboTax Business Windows

AliciaP1

For either a Form 1065 or a Form 1120S this can be done by following these steps:

Within your tax return, under the Federal Taxes tab click Balance Sheet
This is where you enter your end-of-year assets and Continue
If you are eligible to skip this section, but still want to report your balance sheet, you will see the Good News screen and you will choose No (if you are required to report your balance sheet based on your income or asset values you will not see this screen)
Click Edit on the Balance Sheet line
You can either use Guide Me or Quick Entry to enter all your balance sheet information - if you only need to report the adjustment use Quick Entry
Enter your assets and click Done
Double-check your totals and click Continue
Enter your liabilities and your Equity information
You will enter your RE adjustment under Adjustments to XXX Equity using a positive number if it was a credit to RE and a negative number if your entry was a debit to RE

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JR7964

That answer from 2022 seems not to apply in 2023. The balance sheet says to make the adjusment on the retained earnings reconciliation page.

Here is a new problem. I entered my retained earnings on the reconciliation page but TurboTax failed to update it on my balance sheet. Does anyone know what steps I must take to make this update/ correction.?

AliciaP1

There should be an open box on the Retained Earnings line of your balance sheet in the Ending balance column. You need to enter your current year-ending retained earnings including the adjustment amount in that box.

You can get back to your balance sheet entry screens in TurboTax Business under the Federal Taxes tab and Balance Sheet sub-tab.

@JR7964

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