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    Greene12's Avatar
    Greene12 Posts: 2, Reputation: 1
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    #1

    Nov 9, 2010, 12:39 PM
    Journal entry for income tax payments
    Our corp is responsible for paying federal income tax and we are on a payment schedule with the IRS. I credit cash and debit federal income tax payable. However, how do I set up the initial balance that we agreed to pay. Credit Fed income tax payable and debit Retained Earnnings?
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
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    #2

    Nov 10, 2010, 12:27 PM

    Let me ask you some questions about this before answering.

    1. Did this result from an IRS audit? Are the taxes payments for previous years resulting from that audit?

    2. Is the amount material?

    3. Do you have audited financial statements? If not, do you provide the statements to your bank or other institutions, or are they solely in-house statements?
    Graemo's Avatar
    Graemo Posts: 1, Reputation: 1
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    #3

    Dec 9, 2010, 08:13 AM
    If a loss was reported for the period,are there any entries that will be made to affect the account?
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