Fundamentals of the Business Tax Balance Sheet
Author: Jane Ryder
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2027 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
Develop best practices for preparing and reporting business tax return balance sheets. Determine the appropriate way to work with each entity's available accounting reports, from simple P and Ls which require you to develop and maintain the balance sheet yourself, to a complete and accurate set of financial statements prepared by the client, and everything in between! We'll discuss balance sheet items affecting basis such as retained earnings, shareholder or partner loans, and non-deductible expenses reported on Schedule M1, decisions regarding classifying transactions based on basis considerations, educating the client on balance sheet issues, and more.
Publication Date: October 2024
Designed For
Business tax preparers.
Topics Covered
- Balance Sheets for S Corporations
- Schedule L, Balance Sheet, Schedule M-1, Reconciliation Tax to Books, & Schedule M-2 AAA
- The Case for Balance Sheets
- Liabilities
- Equity
- Client's Financial Report for Preparing Business Tax Returns
- Year-End Records to Request from All Clients to Support Balance Sheet
- Preparing a Balance Sheet Based on State of Taxpayer Records
- Steps to Ready Client Reports for Tax Return
- Shareholder & Partner Distributions
- Providing Annual Journal Entries to Clients
- Assets
- Balancing the Balance Sheet
- Cash Balance Sheets Showing A/R or A/P
- Accounting for Shareholder Distributions
- Review Appendix Forms
Learning Objectives
- Identify basic balance sheet fundamentals for a complete & accurate tax return
- Identify best practices for supporting tax balance sheets with available client reports
- Identify better processes for clients and bookkeepers for better balance sheets
- Explain the difference between book income and tax income and how to report them
- Identify how Schedule L, Schedule M-1, and Schedule M-2 interact on a tax return
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
