Question

Re: 1120 S -- Balance sheet out of balance by amount equal to undistributed income (RE)

Forum|Forum|3 years ago
March 4, 2023
1 reply
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I am having the same issue. For what it is worth, I have been using TT for over a decade and I have never had this issue. I assume that the software is doing something different this year as my situation has not changed--except that I have been able to skip the balance sheet section in prior years. Since my assets have not increased much this year, I can't imagine why this has changed. In any case, TT is not providing enough information on this issue and its calculations are probably wrong.

C

CarissaM

You are commenting on an older thread.

We cannot see the return here in this public forum so we cannot see what caused the change. Please click here to speak with us by phone so we can better look into this. @MJTBIZ

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M

MJTBIZAuthor

I did figure this out. My income last year was just enough to trigger the balance sheet requirement in TT, which had never been the case before. I have an S-corp and my profit/loss goes directly to my 1040 through the K1. So, there is no need to separate my business accounts from my personal accounts--I do as a matter of tracking my expenses, but the cash in my business accounts is mine to use as needed. This means that my year end cash on hand for the business does not match my retained earnings/shareholder equity. Since I have no other real assets in the business, the balance sheet needs to show that cash on hand and retained earnings/shareholder equity are the same. When I enter the retained earnings (net profit) of the business as my end of tax year cash on hand, it all works.

I appreciate TT reaching out on this thread to help. I did call over the weekend, but was routed to a personal tax specialist that was not much help with the business forms. When even she could not get me to the right specialist, I was pretty demoralized--taxes are due in a week or so--and I was not happy with TT. So good on CarissaM and TT for following up on the thread.