accounting question


F

franconley

I have recently begun doing the 1120 for a C Corp.

As I understand it, the Federal Taxes Paid for the Corporation are not
deductible for tax purposes.

1) Is that correct?

2) Since we have to list the balance sheet and changes in Retained
Earnings from the beginning to the end of the year = Profit (Loss), I
am wondering how the taxes paid are accounted for, if they are not
deductible, so that the balance sheet is correct and the profit/loss is
correct.

Can anyone explain this to me?

3) I assume that state excise taxes are deductible for federal tax
purposes.

thanks for any help,

fran

(e-mail address removed)
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P

Paul A Thomas

I have recently begun doing the 1120 for a C Corp.
For a calander year-end business (December 31) the return was due March
15th. If that's the case with you, I hope you have an extension.

As I understand it, the Federal Taxes Paid for the Corporation are not
deductible for tax purposes.

1) Is that correct?
Yes, federal income taxes paid are not deductible.

2) Since we have to list the balance sheet and changes in Retained
Earnings from the beginning to the end of the year = Profit (Loss), I
am wondering how the taxes paid are accounted for, if they are not
deductible, so that the balance sheet is correct and the profit/loss is
correct.
It's an M-1 adjustment, Line 2 (page 4 of the 1120)


Can anyone explain this to me?

Basically, show net profit (loss) per the books (which includes a deduction
for taxes) and Line 2 is an add-back item to book profit/loss to obtain the
tax profit/loss number. The form says "See page 24 of the instructions)


3) I assume that state excise taxes are deductible for federal tax
purposes.


State and local income taxes (and other types of tax) are deductible on the
federal tax return.


It might not hurt to have your returns prepared by a competent tax
professional.
 
F

franconley

thanks for the info.
my return was prepared on time,
we had losses in the previous year, so I didnt need to do the m-1
adjustment but I am looking ahead.
thanks again
fran
 
A

Allan Martin

I have recently begun doing the 1120 for a C Corp.

As I understand it, the Federal Taxes Paid for the Corporation are not
deductible for tax purposes.

1) Is that correct?
Sorry, I don't want to sound incentive, but if you have to ask you should
not be doing the return.
 
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A

Allan Martin

I have recently begun doing the 1120 for a C Corp.

As I understand it, the Federal Taxes Paid for the Corporation are not
deductible for tax purposes.

1) Is that correct?

2) Since we have to list the balance sheet and changes in Retained
Earnings from the beginning to the end of the year = Profit (Loss), I
am wondering how the taxes paid are accounted for, if they are not
deductible, so that the balance sheet is correct and the profit/loss is
correct.

Can anyone explain this to me?

3) I assume that state excise taxes are deductible for federal tax
purposes.

thanks for any help,

fran

(e-mail address removed)
__________________
 

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