SEP Contribution For S Corp Shareholder Made In Current Year

[clacourte1]

If an S Corp shareholder makes a SEP contribution for 2024 in 2025 before the due date of the return, it's my understanding that it can either be deducted in 2024 or 2025. If they're on a cash basis and want to deduct the contribution on the 2024 return, where should this be entered in ProConnect to account for the book/tax difference?

[rbynaker]

I typically keep my client's books on the income tax basis of accounting so I would book it as a liability on the balance sheet.  If you have some other non-tax reason for cash basis books it could be an M-1 adjustment for deductions on return not on books (and then it reverses next year as expenses on the books not on the return).

[clacourte1]

Great, thanks!