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Entering and calculating the Schedule M-1 in ProConnect Tax
by Intuit•1• Updated 5 months ago
Below are instructions for entering the Schedule M-1 adjustments in the Corporate, S-Corporate and Partnership modules of the program, along with explanations of how the program calculates the M-1. Select the applicable return type below for more information.
Line 1, net income (loss) per books, of the Schedule M-1, is calculated on Form 1120:
Schedule M-1 line | Description |
Line 1, Net income (loss) per books | The calculation for this line is as follows: (line 10 + line 7 + line 8) - (line 2 + line 3 + line 4 + line 5) = line 1 |
Line 2, Federal income tax per books | This is part of decreases. |
Line 3, Excess of capital losses over capital gains | This is part of decreases. It's based off amounts entered in the Dispositions (Sch. D/4797/etc.) screen. |
Line 4, Income subject to tax not recorded on books this year (itemize) | This is part of decreases. |
Line 5, Expenses recorded on books this year not deducted on this return (itemize) | This is part of decreases. |
Line 7, Income recorded on books this year not included on this return (itemize) | This is part of increases. |
Line 8, Deductions on this return not charged against book income this year (itemize) | This is part of increases. |
Line 10, Income (page 1, line 28) - line 6 less line 9 | This is income or loss from 1120, page 1, line 28. |
The program will automatically apply any increases and/or decreases when PTO recognizes a difference between book and tax.
Follow these steps to enter a Schedule M-1 adjustment manually:
- Go to the Input Return tab.
- From the left of the screen, select Balance Sheet and choose Schedule M-1, M-3.
- Choose Schedule M-1.
- Enter the Federal income tax (automatic if accruing), if applicable.
- This is Schedule M-1, line 2.
- Enter the Income subject to tax not recorded on books (Ctrl+E), if applicable.
- This is Schedule M-1, line 3.
- Enter all applicable amounts under the Expenses Recorded on Books not Included on this Return subsection.
- This is Schedule M-1, line 5.
- Enter all applicable amounts under the Income Recorded on Books not Included on this Return subsection.
- This is Schedule M-1, line 7.
- Enter all applicable amounts under the Deductions not Charged Against Book Income subsection.
- This is Schedule M-1, line 8.
Follow these steps to enter officers' life insurance premiums on a corporate return:
- Go to the Input Return tab.
- On the left-side menu, select Balance Sheet.
- Click on Schedule M-1.
- Scroll down to the Expenses Recorded on Books not Included on this Return subsection.
- Enter the amount in Officer life insurance premiums.
Line 1, net income (loss) per books, of the Schedule M-1, is calculated on Form 1120-S:
Schedule M-1 line | Description |
Line 1, Net income (loss) per books | The calculation for this line is as follows: (line 8 + line 5 + line 6) - (line 2 + line 3) = line 1 |
Line 2, Income included on Schedule K, lines 1, 2, 3c, 4, 5a, 6, 7, 8a, 9, and 10, not recorded on books this year (itemize) | This is part of decreases. |
Line 3, Expenses recorded on books this year not included on Schedule K, lines 1 through 12 and 14p (itemize) | This is part of decreases. |
Line 5, Income recorded on books this year not included on Schedule K, lines 1 through 10 (itemize) | This is part of increases. |
Line 6, Deductions included on Schedule K, lines 1 through 12 and 14p, not charged against book income this year (itemize) | This is part of increases. |
Line 8, Income (loss) (Schedule K, line 18). Subtract line 7 from line 4 | This is income or loss from Schedule K, line 18. |
The program will automatically apply any increases and/or decreases when PTO recognizes a difference between book and tax.
- Go to the Input Return tab.
- From the left of the screen, select Balance Sheet, M-1, M-2, M-3 and choose Schedule M-1, M-3.
- Choose Schedule M-1.
- Enter all applicable amounts under the Income on Schedule K Not Recorded on Books (+) section.
- This is Schedule M-1, line 2.
- Enter all applicable amounts under the Expenses Recorded on Books not Included on Schedule K (+) section.
- This is Schedule M-1, line 3.
- Enter all applicable amounts under the Income Recorded on Books not Included on Schedule K (-) section.
- This is Schedule M-1, line 5.
- Enter all applicable amounts under the Deductions on Schedule K not Charged Against Book Income (-) section.
- This is Schedule M-1, line 6.
Clicking the + button in any of these fields will open multi-line input.
Follow these steps to enter a Schedule M-1 adjustment manually:
Line 1, net income (loss) per books, of the Schedule M-1, is calculated on Form 1065:
Schedule M-1 line | Description |
Line 1, Net income (loss) per books | The calculation for this line is as follows: (line 9 + line 6 + line 7) - (line 2 + line 3 + line 4) = line 1 |
Line 2, Income included on Schedule K, lines 1, 2, 3c, 5, 6a, 7, 8, 9a, 10, and 11, not recorded on books this year (itemize) | This is part of decreases. |
Line 3, Guaranteed payments (other than health insurance) | This is part of decreases. |
Line 4, Expenses recorded on books this year not included on Schedule K, lines 1 through 13d, and 16p (itemize) | This is part of decreases. |
Line 6, Income recorded on books this year not included on Schedule K, lines 1 through 11 (itemize) | This is part of increases. |
Line 7, Deductions included on Schedule K, lines 1 through 13d, and 16p, not charged against book income this year (itemize) | This is part of increases. |
Line 9, Income (loss) (Analysis of Net Income (Loss), line 1). | This is line 1 of the Analysis of Net Income (Loss) section of Form 1065; which is calculated as (Sum of lines 1-11 of Schedule K) - (Sum of Schedule K, lines 12 through 13d, and 16p). |
- Go to the Input Return tab.
- From the left of the screen, select Balance Sheet, M-1, M-2, M-3 and choose Schedule M-1, M-3.
- Choose Schedule M-1.
- Enter all applicable amounts under the Income on Schedule K Not Recorded on Books (+) section.
- This section relates to Schedule M-1, line 2.
- Hold down Ctrl+E on your keyboard in the Other (Ctrl+E) field, if applicable. Then, enter Description and Amount and click OK.
Refer to this article for information on entering and allocating partners' guaranteed payments for Schedule M-1, line 3.
- Enter all applicable amounts under the Expenses Recorded on Books not Included on Schedule K (+) section.
- This is Schedule M-1, line 4.
- Enter all applicable amounts under the Income Recorded on Books not Included on Schedule K (-) section.
- This is Schedule M-1, line 6.
- Enter all applicable amounts under the Deductions on Schedule K not Charged Against Book Income (-) section.
- This is Schedule M-1, line 7.
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