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Tax Accounting System (TAS)

Automatic adjustments

You can set adjusting entries in either the Home window or TAS to automatically adjust certain items of taxable income and expense based on selected limitations or computations for all associated entities and binders.
You can set adjustments  to automatically adjust certain items of taxable income and expense based on selected limitations or computations. Tax adjustments are entered in a journal entry format, producing the book/tax reconciling differences on various Federal forms, with the assignment of a debit/credit impact TRC/TCC code to each adjustment specifying its presentation on the Schedule M-1.
Automatic calculations include:
  • Reverse account balances to zero
  • Adjust for differences between beginning and ending balances
  • Close net income
  • Reduce amounts by a user-defined percentage

Common automatic adjustments

Common automatic adjustments
Entry
Drop-down
Balance entry account
Reverse option
End / beginning difference
% of difference
Reverse federal income tax provision (FIT)
Target account: Fed income tax provision


Source account: Fed income tax provision
Retained earnings (unappropriated)
Negate
Ending
100%
Meals and entertainment
Target account: meals & entertainment


Source account: meals & entertainment
Retained earnings (unappropriated)
Negate
Ending
50%
Allowance for bad debt
Target account: bad debt reserve


Source account: bad debt reserve
Bad debt expense
Negate
Difference
100%

Set automatic adjustments in TAS

  1. Select
    Tax Accounting System
    , and then
    Adjustments
    .
  2. Expand the adjustments.
  3. Select an adjusting entry and select
    Edit
    .
  4. Select
    Account radio
     and make the following selections:
    • Accounts - the target journal entry account.
    • Source Account - the balance for the target account used in the journal entry comes from this source account.
    • Balance Type - select the balance type of the source account (for example, preliminary, book, reclassification, or tax).
    • Percentage - allows you to indicate a percent of an account to be adjusted and thus create custom calculations.
    • Reversing and Balance Options - You must select Ending, Beginning, or Difference first, and then Negate, if applicable.
    • Beginning/Ending - applies the automatic adjustment to the beginning or ending account balance. Commonly used for tax exempt income.
    • Difference - takes the difference in target and source account balances to calculate the adjustment. This is commonly used for reserve liability accounts.
    • Negate - reverses the amount in the selected target account. This is commonly used to reverse the FIT general ledger account.
note
An individual account can be used in only 1 account type automatic adjustment per chart type (book, reclass, tax, and so on). The offsetting account must be marked as Balance Entry.

Working Trial Balance (WTB)

Working Trial Balance enables you to review your tax information in an accounting working trial balance format and displays prior year historical balances for comparison.
The WTB shows the flow of amounts on the books to the amounts on your tax return in a spreadsheet format conveniently on 1 page.
The WTB information is updated when you perform a compute.

Currencies

To assign an exchange rate chart or set viewing options go to
Currency Translation
 in Tax Accounting System.
note
Consolidation binders sum each member binder for each currency. If different local and functional currencies and different exchange rate charts are used for each member binder, then the WTB will only show the translated U.S. dollar amounts.

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