Common questions about Corporate Deductions in Lacerte

Table of contents:

Entering corporate charitable contributions in Lacerte

A corporation can't deduct contributions that total more than 10% of its taxable income for the tax year. Refer to IRS Pub. 542IRS Pub. 542for instructions on how to figure taxable income for this purpose.  

Follow these steps to enter current cash contributions:

1. Go to Screen 20, Deductions.
2. Scroll down to the Contributions (Use Screen 24 to enter contribution carryovers) subsection.
3. Enter the contribution amount in Cash (Ctrl+E).

Follow these steps to enter current noncash contributions:

1. Go to Screen 25, Noncash Contributions (8283).
2. Enter information about the noncash contribution in the applicable fields.
3. Charitable contributions print on Form 1120, line 19.

Follow these steps to enter contribution carryovers:

1. Go to Screen 24, Contribution Carryovers.
2. Enter the amounts carried over in the Contribution Carryovers section.
   • You can also use the Consolidated Contribution Carryover section if you're completing a consolidated return.

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Entering Corporate Officers Compensation in Lacerte

Follow these steps to enter officer compensation:

1. Go to Screen 2, Officer Information.
2. Enter the fields in the Officer Information section:
   • Officer name
   • Street address, city, state, ZIP code
   • Social Security number
   • Officer title
3. Go to Screen 20, Deductions.
4. Scroll down to the Salaries and Wages section.
5. In the Officer Salaries subsection, select the Compensation of Officers button.
6. Enter the officer's compensation. These entries must correspond to the numbers assigned to the officer in Screen 2, Officer Information.

The input for officer salaries are limited to 12 officers. Any additional officers must be entered using batch input.

To enter compensation for more than twelve officers:

1. Go to Screen 20, Deductions.
2. Hold down Ctrl+W to switch to Batch mode.
3. Select 20.1 Deductions from the left panel (if not already there).
4. Locate a blank line under the Code column.
5. Enter 113 in the Code column (for officer 13) and enter the Amount. 
6. Enter 114 in the Code column (for officer 14) and enter the Amount.
   • Continue entering officers in sequential order (up to the maximum of 49 officers allowed). 
   • For the amount of wages to correspond to the correct officer, the last two digits of the code must match the number assigned to the officer on Screen 2, Officer Information.
   • For example, officer 15 should have wages entered in code 115. This is especially important if the numbering in Screen 2 skips because officers have been deleted in prior years.
7. Once finished, hold Ctrl+W again to switch back to Interactive mode.

Schedule 1125-E, Compensation of Officers will calculate when total receipts from Form 1120, Page 1 (Line 1a plus Lines 4 to 10) are $500,000 or more. If total receipts are less than $500,000, the Schedule 1125-E won't generate, though the compensation total will still appear on Form 1120, Page 1, Line 12.

How do I get Schedule E, Compensation of Officers, to print with a return?

Schedule E is required only when the corporation total receipts are $500,000 or more.

• To force Schedule E to print for all returns:
  1. Go to the Settings menu.
  2. Click Options.
  3. Click the Tax Return tab.
  4. In Federal Tax Options, set Officer Schedule to Force.
• To force Schedule E for print for one return: Enter 2 for Officer’s Schedule 1=When Applicable, 2=Force in the Deductions screen.

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How do I Generate an Amount on Form 1125-E Line 3

To generate an amount on Form 1125-E, line 3 in the S Corporate module:

1. Go to Screen 15, Deductions.
2. Enter the amount of compensation claimed elsewhere in, Less: officer compensation claimed elsewhere on the return.

To generate an amount on Form 1125-E, line 3 in the Corporate module:

1. Go to Screen 20, Deductions.
2. Scroll down to the Officer Salaries subsection.
3. Enter the amount in Less compensation claimed elsewhere.

This amount will print on 1125-E, line 3, and reduce the amount on line 2.

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Generate a statement for Form 1120 Line 26 in Lacerte

Per IRS instructions, Lacerte generates a statement for Form 1120, line 26, listing all allowable deductions that aren't deductible elsewhere on the form.

To generate a statement for line 26:

1. Enter deduction type and amounts in the Other (Ctrl+E) field in Screen 20.1, Deductions.
2. The deductions will be listed on the statement Form 1120, Line 26 Other Deductions.

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Additional information

• Entering corporate charitable contributions in Lacerte
• Entering Corporate Officers Compensation
• Corporation Form 1120 Shows Statement for Deductions on Line 26

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