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You will need to adjust each balance sheet item that does not match the tax return. There is no need to make any entries to change income and expense items in 2008, as the net income or loss flowed into retained earnings anyway. One big journal entry to make the book ending 2008/beginning 2009 balance sheet match, with the plug to retained earnings should do it.
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The entire ending balance sheet on the books for 2008 needs to match the ending balance sheet on the tax return. If the only item that is off is cash, then it will be simple. I suspect there are other balances that are off. Make one large journal entry that adjusts each balance sheet account and a debit or credit to Retained Earnings to balance it.
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Okay. So make 1 big journal entry to make the ending 2008 book balance to the beginning 2009 tax return. SO for example (referring to my original question) the journal entry would be:
Dr. Cash 6400
Dr. Auto Expense 4600
Cr. Retained Earnings 11000
If you are making the JE dated 12/31/2008, you can adjust the entire trial balance as follows:
To make it simple, make one journal entry per balance sheet account (except Retained Earnings). For example:
DR Cash 1400
Cr Retained earnings 1400
To reduce the book Auto Expense the entry will be:
CR Auto Expense 4600
DR Retained Earnings 4600
Hopefully when you are done, the Retained Earnings balance on the books will match the tax return.