Balance Sheet for small S Corporation

[strongsilence]

I like to present the balance sheet for small S Corporation even when not required as it helps me reconcile beginning and ending cash and helps me locate expenses and contributions that could be overlooked.  And, I think, that it is a tax return with a Balance Sheet is a better product. Downside is that it slows me down as these types of small clients don't keep good books and I need to investigate. The spreadsheet is an example of what I do.

What do you do?

2025
Bank Balance 1/1			39,165
Deposits/ gross sales		429,504
Expenses paid in cash, per client sheet	(436,212)
Balance, 12/31, calculated above	32,457
Balance per Bank			60,914
Unlocated Difference.		28,457

[sjrcpa]

Ask the client where the extra money came from.

Is that the balance per the bank statement, or is it the reconciled balance?

Is there a 12/31/25 credit card liability?

[strongsilence]

thank you sjr

I know what to look for.

My main question is to survey the folks who don't report the BS.

[IRonMaN]

To know that your total income and expenses are correct for a corporation or partnership, you have to prepare a trial balance.  If you have a trial balance, there is no reason to not load the balance sheet into the tax return.  Based on the questions that pop up here, you know there are a ton of returns being incorrectly prepared by Intuit users because they have no clue on what a balance sheet is.

[abctax55]

 I have *ONE* entity (an S-Corp) that doesn't have a set of books.  Granted, some of the QBO 'books' are often GIGO.... don't get me started.

The one without any set of books I enter the totals into a QB file I set up for her.  Income in, expenses per the excel spreadsheet, add/subtract a few things I know she doesn't put into excel.  She gives me the ending cash balance. 

Any difference - we sit down & chat about whether she took money out/put money in.   Usually the answer is 'nope, I didn't'   THEN we find out what income/expense figure is wrong.   

I 100% agree - there is absolutely no way to be sure all activity is captured without reconciling cash, and having a balance sheet.    

[TaxGuyBill]

In my opinion, if they don't keep an accurate, balanced set of books, they should not be taxed as an S-corporation.  In my opinion, it isn't an option.

Whether or not you include it on the tax return itself is up to you.  I know that some people have the mindset to not give the IRS any information that they don't need (such as a Balance Sheet when it isn't required on the tax return), but I would still add it.  Even if you decide you don't want it included with what is sent to the IRS, I would still prepare the return with it and have my copy and the client's copy with the Balance Sheet.

[strongsilence]

I appreciate kindness for all of you to share.  

 balanced set of books, they should not be taxed as an S-corporation.  In my opinion, it isn't an option.

I have one client to talk with on this.

[strongsilence]

Any difference - we sit down & chat about whether she took money out/put money in.

Helpful tip. I do this for a one client, so she knows the difficulty I have in preparing her tax return without her doing a proper cash reconciliation.  It's a way of getting the tax return right AND promoting my skills AND defending my bill.