Skip to main content

Legal

Tax & Accounting

Trade & Supply

Risk & Fraud

News & Media

Books

Developers

Integrate with CS Professional Suite

Examples of tax code adjustment entries

The following examples describe common tax code adjustment entries.

Example 1

Federal Income Taxes (1120 entity type): Accounts for federal income taxes can be coded to tax code 205. This tax code is adjusted for the amount of federal income taxes in the Line 2 (Federal income taxes per books) tab with an offset to the applicable M-1 tax code.

Example 2

Penalties (1120 entity type): Accounts for penalties can be coded to the tax code for other deductions. This tax code is adjusted for the amount of penalties in the Line 8 (Deductions on this return not charged against book income this year ) tab with an offset to the applicable M-1 tax code.

Example 3

The balance sheet account Allowance for bad debts decreased by $10,000.00 during the tax year. An additional $10,000.00 in bad debt expense needs to be recorded on the tax return. The tax code for bad debts is adjusted in the Line 2 (Federal income taxes per books) tab by $10,000.00 with an offset to the applicable M-1 tax code.

Example 4

Accounts for depreciation, amortization, depletion, organization or start-up costs, Section 179 expense, and 4797 gain/loss can be coded to the associated tax code.
The application treats the following tax codes as income statement tax codes for the following entity types:
Tax codes as income statement tax codes for:
1120
1120S
1065
207
None
1120S, L14a
-Book depr-other than COGS
1065, L16a
-Book depreciation
208
1120, L20a
-Book depr-other than COGS
1120S, L15
-Page 1 depletion - book
None
209
1120, L21
-Page 1 depletion - book
None
None
214
None
1120S, L19
-Total book amortization
1065, L20
-Book amortization
215
1120, L26
-Total book amortization
None
Sch M1, L4
-Start-up > org costs - book
217
1120, L21
-Page 1 depln other than oil/gas
None
None
218
Sch M1, L5
-Org > start-up book expense
Sch M1, L3
-Org > start-up book expense
None
228
None
Sch M1, var
-Book section 179 amount
Sch M1, var
-Section 179 expense - book
283
Sch A, L5
-Book depreciation - COGS
Sch A, L5
-Book depreciation - COGS
None
488
None
Sch M1, var
-4797 gain/loss - book
None
489
Sch M1, var
-4797 gain/loss - book
None
None
The preceding tax codes are increased or decreased in the appropriate tab in the
Enter Tax Code Adjustments
 screen with the offset applied to the applicable M-1 code. UltraTax CS users should exclude any tax code adjustment entries from being included in the tax export because the M-1 adjustment and tax amounts are typically calculated automatically based on information in the asset module.
Alternately, if accounts are coded with tax code 88888 so the accounts are not sent to UltraTax CS, tax code 88888 should be adjusted for the book-to-tax difference in the
Enter Tax Code Adjustments
 screen. (Note: Tax code units shouldn't be assigned to tax codes 88888 or 99999.)
Tax depreciation is $20,000.00 greater than book depreciation
 - The tax code for depreciation is adjusted in the Line 8 (Tax deductions not on books) tab by $20,000.00 with an offset to the applicable M-1 tax code. This entry is marked as
exclude
 so it's not sent to UltraTax CS as part of the tax export.

This article applies to:

  • Product: Workpapers CS
  • Subject: Integration

Related content