i just want to confirm if i have a difference in beginning year cash to the actual amount on the books do i do an m1 adjustment line 2 or m2 adjustment?.
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Well, he has done it wrong for 5 years. If it is my client and he doesn't want to do it the right way he gets transferred from my client list to my "former" client list.
If it is a cash based taxpayer, doesn't a difference in cash mean a difference in either revenues or expenses? You don't plug equity to make it go away. If it is $1, adjust through the current year income or expenses. If it is $100,000, you are looking at amending the prior year return.
If this software is in your control or if you have access to it, put a lock or password on it after you have finalized the 2023 tax return. QBO has this feature. This will prevent prior year adjustments by bookkeepers or business owners.
It is a messup in thier books, and the difference is less than 20k. I thaught it goes as an m1 adjustment because its 1065 return
Yes but wher would i put the adjustment so ot can reconcile to what they have in books m1 or m2 its a 1065 partnership
But I would still need to adjust this year
Well, he has done it wrong for 5 years. If it is my client and he doesn't want to do it the right way he gets transferred from my client list to my "former" client list.
This could be a turning point in your relationship with your client. Teach him to do it right. Start now. Then, if he does, your practice gets better.
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