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Balance sheet out of balance in turbotax business

Forum|Forum|2 years ago
February 11, 2024
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This is my first year filing return for my S-corp I founded in 2023. At the beginning, I funded some money to my business bank account which is counted as startup costs, and got deducted as new corp expenses. At the end of the year, I have slightly more than the initial fund I deposited, which I treated it as assets by the end of year. For some reason, the balance sheet couldn't be balanced out. How could I trouble shoot the issue?

TurboTax Online

Best answer by Mike9241

are you out of balance by the amount you put in initially for start-up costs? That needs to be shown as either paid-in capital or stock. it's important to get this right because sooner or later you're going to have to provide in your 1040 form 7203 which is to show the IRS you had enough basis in the S-Corp to take any net losses and to make any distributions to you tax-free. Keep track of your basis starting with the first year. if you don't there will be a mess in the years the 7203 is required.

pro software tracks basis for the tax preparer and stockholders in most cases. Turbotax does not track basis as far as I know

PatriciaV

Are you sure you need to include a Balance Sheet for your S-Corp? You can skip the Balance Sheet section if:

Total business income (before deductions) is under $250,000; and
Your business is not filing an Alabama, Connecticut (non-partnership), District of Columbia, Georgia, Kentucky, Louisiana, Massachusetts, Mississippi, New Jersey (non-partnership), New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, or Tennessee return; and
Corporation year-end assets are under $250,000 or partnership/LLC year-end assets are under $1,000,000.

See also:

Troubleshooting balance sheet issues can become a complex and tedious process. You may consider upgrading to TurboTax Live. This online service provides step-by-step guidance from a tax expert whenever you need assistance, either over the phone or by screensharing.

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Mike9241Answer

are you out of balance by the amount you put in initially for start-up costs? That needs to be shown as either paid-in capital or stock. it's important to get this right because sooner or later you're going to have to provide in your 1040 form 7203 which is to show the IRS you had enough basis in the S-Corp to take any net losses and to make any distributions to you tax-free. Keep track of your basis starting with the first year. if you don't there will be a mess in the years the 7203 is required.

pro software tracks basis for the tax preparer and stockholders in most cases. Turbotax does not track basis as far as I know