Discussion:Accrual ... again?
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Discussion Forum Index --> Tax Questions --> Accrual ... again?
| 17 September 2007 | |
| Am filing a 2006 1120S for a new client. Looks like they filed on Accrual basis in 2005... and then in 2006 paid $50K in back taxes. Must I file Accrual again this year... and lose the ability to deduct the taxes paid... or can I switch to Cash? | |
Bushmaster (talk|edits) said: | 17 September 2007 |
| If they were on accrual in 2005 (and presumably deducted the taxes then), how is it you are losing the deduction? I think accrual to cash requires prior consent. Check 3115. | |
| 17 September 2007 | |
| Sorry, should have been clearer. They only deducted $16K for taxes in 2005. I know they paid an additional $50K in 2006 that applied to prior years. So they've potentially lost $34K in deductible taxes. | |
Bushmaster (talk|edits) said: | 17 September 2007 |
| Huh? How is that? Deduct the additional 34k in 2006 and move on. Or if you so prefer, amend 2005 for the additional 34k. | |
Bushmaster (talk|edits) said: | 17 September 2007 |
| I just read your profile. Tough year for ND. | |
| September 17, 2007 | |
| Exactly as Bush said. On both counts. We made MI feel better and have helped Lloyd stick around, which is good news for ND fans. | |
| 17 September 2007 | |
| Thanks to you both. Yeah, Saturdays are like a bad dream that I can't wake up from... | |
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