Engagement Schedule. Schedule M-3 Tutorial. December 07 United States

Transcription

1 Engagmnt Schdul M-3 Tutorial Schdul M-3 Tutorial Dcmbr 07 Unitd Stats

2 Schdul M-3 Schdul M-3 applis to: C and S Corporations whr Total Assts ar qual or gratr than $10 million OR consolidatd d ntity Partnrships whr Total Assts or Adjustd Total Assts ar qual to or gratr than $10 million OR th Total Rcipts for th taxabl yar is qual to $35 million or mor OR a Rportabl Entity Partnr (a partnr that is ithr a C Corp, S Corp or Partnrship) with rspct to this partnrship owns or is dmd to own an intrst of 50% or mor in th Partnrship s capital, profit or loss on ANY ONE day during th tax yar of th Partnrship Schdul M-3 Dcmbr Unitd Stats 2

3 M-3 from th Engagmnt g sid For Engagmnt, th accountant has two choics for M-3: 1. Crat FTJEs with offsts groupd to nw M-3 groupings g (NOTE: Ths ar ovrrids in th Tax Softwar) 2. Crat FTJEs with offsts groupd to old M-1 groupings (This is th rcommndd mthod and th mthod dscribd in th Bst Practics for Engagmnt) Mthod #2 is rcommndd bcaus: It dos not rquir a chang in how accounts ar groupd M-3 may b rquird on yar, and M-1 th nxt yar M-3 groupings ar all ovrrids that go to Worksht Sch L/M -> Schdul M- 3 (Intrviw Forms L-6 and L-7) Schdul M-3 Dcmbr Unitd Stats 3

4 M-3 from th Tax sid Two mthods to crat an M-3: 1) Worksht Sch L/M -> Schdul M-3 (Intrviw Forms L-5, L-6, L-7, L-8) 2)Entr book/tax diffrncs on rvnu/xpns Intrviw Forms or Worksht Viw (prfrrd) Schdul M-3 Dcmbr Unitd Stats 4

5 Schdul M-3 for Engagmnt g (Bst Practic) Tax yar 2004 will nd to us th M-3 groupings or do th Schdul M-3 ntris manually in th tax rturn. Bginning i with tax yar 2005 and Engagmnt v. 4.1, Schdul M-3 ntris will support tmporary and prmannt balanc transfrs for C Corporations ONLY (M-3 box must b chckd in th Account Grouping Options dialog). Bginning g with tax yar 2006 and Engagmnt g v. 4.7, Schdul M-3 ntris will support tmporary and prmannt balanc transfrs for C Corporation, S Corporation and Partnrship rturns (M-3 box must b chckd in th Account Grouping -> Options dialog). Bginning with tax yar 2006 and Engagmnt v. 5.0, Schdul M-3 Option cods will b supportd. If th M-3 box is chckd for th Tax Grouping, thn usrs will b abl to go into th Account Grouping dialog and dit th groups and subgroups via th Advanc scrn or right click on th group or subgroup and slct Edit. Thr will b a nw column/lin that is titld M-3 Option. By dfault, ths options ar blank. Usrs will b abl to mark th groups and subgroups for a spcific lin for th Schdul M-3 instad of having to go into th Tax Rturn and ntring this cod. Schdul M-3 Dcmbr Unitd Stats 5

6 Schdul M-3 for Engagmnt Bst Practic Continud Do not us th M3 groupings whn using Engagmnt v. 4.1 or highr. Ths groupings import to Worksht Sch L/M -> Schdul M-3 (Intrviw Forms L-6 and L-7). If you ar using an Engagmnt vrsion that dos not support th M-3 chckbox, th M3 groupings will nd to b usd or th M-3 ntris will nd to b manually ntrd in th tax rturn. Do not import to th Schdul M-3 Workshts or L-6 and L-7 Intrviw Forms whn possibl Worksht Sch L/M -> Schdul M-3 (Intrviw Forms L-6 and L-7) ar ovrrids and if usd will ovrrid all calculations prformd by th tax rturn. This may caus th Schdul M-3 to b incorrct and caus balancing th tax rturn mor complicatd. Som xcptions ar (any lin on th Schdul M-3 that th tax column is grayd out): Incom (loss) from quity mthod forign corporations Gross forign distributions prviously taxd Incom (loss) from quity mthod U.S. corporations Minority intrst for includibl corporations US Dfrrd Incom Tax xpns Stat and local dfrrd incom tax xpns Forign dfrrd incom tax xpns Schdul M-3 Dcmbr Unitd Stats 6

7 Schdul M-3 for Engagmnt Bst Practic Continud To crat a balancd journal ntry, idntify and us an offstting account numbr that should b groupd to on of th following locations: Groupd to a M1 grouping (Prfrrd Mthod S nxt slid for rasons why) NOTE: If th prparr or rviwr is wanting to s th Schdul M-1 in th Tax rturn or California is on of th stats bing prpard whn Schdul M-3 is applicabl for th Fdral Rturn, th following is rcommndd to mak rconciling th Schdul M-1 asir. In Engagmnt, St th Snd to Tax option undr Account Groupings -> Advanc to NO In Tax, Forc th Schdul M-1 to print on: 1120 Worksht Gnral->Rturn Options->Procssing Options->Lin 7 (Form 2 box 33) 1120S Worksht Gnral->Rturn Options->Procssing Options->Lin 11 (Form 2 box 49) 1065 Worksht Gnral->Rturn Options->Procssing Options->Lin 15 (Form 2 box 44) In Tax, Snd th M-3 book/tax diffrncs to th Schdul M /1120S Worksht L/M->Schdul M-3->Gnral and Nt Incom (Loss) Rconciliation->Lin 4 (Form L-5 box 33) 1065 Worksht L/M-1/M-2/M-3->Schdul M-3->Gnral and Nt Incom (Loss) Rconciliation->Lin i 4 (Form L-5 box 33) Groupd to a M3 grouping and hav that M3 grouping st to NO for th Snd to Tax option NOTE: If th Snd to Tax option is st to YES for th M-3 groupings, ths will xport to Tax to th ovrrid ntris in Tax and may caus rconciliation problms. Only us ths groupings to xport to Tax whn th amount is going to th Schdul M-3 whr thr is not a Tax amount (i.. thr is not a plac to ntr this itm on th actual Tax rturn (1120, 1120S or 1065). Groupd to Z Not groupd at all. Schdul M-3 Dcmbr Unitd Stats 7

8 Schdul M-3 for Engagmnt Bst Practic Continud Rasons why th bst practic for doing Tax Journal Entris for th Schdul M-3 is to group th offstting sid of th Journal ntry to a M-1 grouping: You do not hav to dtrmin at th tim of your journal ntry if th M-3 will nd to b producd ProSystm Tax will dtrmin if th M-3 is rquird and us th M-3 or M-1 information accordingly (NOTE: Engagmnt will only xport th Tmporary and Prmannt diffrncs to Tax whn th M-3 box is chckd in th Account Groupings -> Options dialog) You do not hav to chang th journal ntris btwn yars that th Schdul M-3 is rquird and not rquird. Dos not rquir ovrwriting information in Engagmnt or Tax Schdul M-3 Dcmbr Unitd Stats 8

9 Schdul M-3 for Engagmnt Bst Practic Continud Whn complting a Tax Journal Entry, any account group/subgroup that is bing zrod out by th journal ntry will not import to Tax on th initial import. (If th rturn and Engagmnt ar alrady Dynalinkd, thn th zro will transfr ovr) It is bst if doing a Tax Journal Entry to zro out th balanc to lav a fw pnnis/cnts in th account so that whn importd, th grouping will import to th tax rturn. Exampl Account 9000 is groupd to an othr dduction grouping (26) and has a balanc of A tax journal ntry is ntrd to crdit account 9000 for and dbit som othr account. Th group that t th account 9000 is groupd to will not go to tax on th initial iti l Dynalink/GL bridg bcaus th tax column is zro. If th journal ntry is don to crdit account 9000 for and dbit anothr account for th sam amount Thn that grouping will import.01 to th tax rturn but sinc most prparrs don t us pnnis/cnts on thir rturns, thn Engagmnt will import a zro to that lin. This is tru vn if thy chck th box to import th Schdul M-3 book amounts. Th import looks at th tax column and if thr is a zro, thn th import will skip that grouping/subgroup. Schdul M-3 Dcmbr Unitd Stats 9

10 Schdul M-3 for Engagmnt Bst Practic Continud Schdul M-3 pag 1 lin 11 MUST qual C Corps pag 2 lin 30 column A S Corps pag 2 lin 26 column A Partnrships pag 2 lin 26 column A Schdul M-3 pag 2 lin 30 column D MUST qual C Corps pag 1 lin 28 AND Schdul M-1 lin 10. S Corps 1120S pag 3 lin 18 AND Schdul M-1 lin 8. Partnrships 1065 pag 4 Analysis of Nt Incom(Loss) lin 1 AND Schdul M-1 lin 9. Schdul M-3 pag 2 lin 30 must balanc across (i.. columns A+B+C=D) Schdul M-3 Dcmbr Unitd Stats 10

11 Schdul M-3 for Engagmnt Bst Practic Continud Whn prparing a rturn for CA, DC, NJ, OK or MS, nsur th Schdul M-3 ntris ar flowing corrctly to th Schdul M-1 by doing th following: C Corps Worksht Gnral -> Rturn Options -> 1. Procssing Options -> lin 7 (Intrviw Form 2 box 33 = X) (This will forc print th Schdul M-1) Worksht Sch L/M -> Schdul M-3 -> 1. Gnral and Nt Incom (Loss) Rconciliation -> lin 3 (Intrviw Form L-5 box 33 = X) (This will snd all Schdul M-3 book/tax adjustmnts to th Schdul M-1) S Corps Worksht Gnral -> Rturn Options -> 1. Procssing Options -> lin 11 (Intrviw Form 2 box 49 = X) (This will forc print th Schdul M-1) Worksht Sch L/M -> Schdul M-3 -> 1. Gnral and Nt Incom (Loss) Rconciliation -> lin 3 (Intrviw Form L-5 box 33 = X (To Carry)) (This will snd all Schdul M-3 book/tax adjustmnts to th Schdul M-1) Partnrships Worksht Gnral -> Rturn Options -> 1. Procssing Options -> lin 15 (Intrviw Form 2 box 44 = X) (This will forc print th Schdul M-1) Worksht L/M-1/M-2/M-3 -> Schdul M-3 -> 1. Gnral and Nt Incom (Loss) Rconciliation -> lin 3 (Intrviw Form L-5 box 33 = X (To Carry)) (This will snd all Schdul M-3 book/tax adjustmnts to th Schdul M-1) Schdul M-3 Dcmbr Unitd Stats 11

12 Schdul M-3 for Engagmnt Bst Practic Continud Tax Intrviw Forms xplanation of columns (rfr to Worksht Incom/Dductions -> Businss -> Othr Dductions (Intrviw Form A-1 or A-4)) Amount = tax rturn amount This amount flows to Form 1120 pag 1, 1120S pag 1-3 and 1065 pag 1 and 3 AND Schdul M-3 column D. Tmporary and prmannt diffrnc columns Ths amounts flow to th appropriat columns on th Schdul M-3. Whn using Tax v or highr, th Tax program will calculat th book amount whn numbrs ar ntrd for ths columns. Book = Final Book amounts pr th book incom statmnt Ths amounts flow to th Schdul M-3 column A. If no amounts ar ntrd in th tmporary or prmannt diffrnc columns, thn th tax rturn will calculat l th diffrnc btwn th book and tax amount. This amount will b rcordd d as a tmporary diffrnc. If thr is no diffrnc btwn th book and tax amounts, th Schdul M-3 column A and column D will b th sam. Whn a lin on th tax intrviw form dos not allow th usr to distinguish btwn th tmporary, prmannt or book numbrs, thn this lin is an ovrrid or has an ntry on a Automatic Adjustmnt fild: C Corp - Th Book Amounts for Automatic Adjustmnt can b ntrd on Worksht Sch L/M -> Book Amounts (Intrviw Form L-3 lins 90 through 96) S Corp Th Book Amounts for Automatic Adjustmnt can b ntrd on Worksht Sch L/M -> Schdul M-1 -> 6. Book Amounts for Automatic Adjustmnts (Intrviw Form L-3 lins 90 through 95) Partnrship - Th Book Amounts for Automatic Adjustmnt can b ntrd in 2 placs Worksht Incom/Dductions -> Trad or Businss -> 11. Book amounts (Intrviw Form A-1 lins 130 through 133) Worksht Sch L/M -> Schdul M-1 -> 6. Book Amounts for Automatic Adjustmnts (Intrviw Form L-3 lins 90 through 93) Schdul M-3 Dcmbr Unitd Stats 12

13 I n t r v i w M-1 linking from Engagmnt to Tax Whn M-1 is usd, Engagmnt snds FTAX balancs only. M-1s will import dirctly to Worksht Sch L/M -> Schdul M-1 (Intrviw Form L-3). F o r m Schdul M-3 Dcmbr Unitd Stats 13

14 W o r k s h t V i w M-1 linking from Engagmnt to Tax Whn M-1 is usd, Engagmnt snds FTAX balancs only. M-1s will import dirctly to Worksht Sch L/M -> Schdul M-1 (Intrviw Form L-3). Schdul M-3 Dcmbr Unitd Stats 14

15 M-3 linking from Engagmnt to Tax Whn M-3 is usd, Engagmnt snds both th BOOK and TAX balancs to th rturn. Tax will only import th BOOK balanc if I th option undr Fil -> Import ->Dynalink (G/L Bridg) -> Options is chckd to Import Schdul M-3 book amounts. Not th rvrsd ordr n t r v i w F o r m Schdul M-3 Dcmbr Unitd Stats 15

16 M-3 linking from Engagmnt to Tax Whn M-3 is usd, Engagmnt snds both th BOOK and TAX balancs to th rturn. Tax will only import th BOOK balanc if th option undr Fil -> Import ->Dynalink (G/L Bridg) -> Options is chckd to Import Schdul M-3 book amounts. Not th rvrsd ordr W o r k s h t V i w Schdul M-3 Dcmbr Unitd Stats 16

17 M-3 linking from Engagmnt to Tax Whn M-3 is usd, FTJEs dtrmin Prm vs. Tmp, dpnding on how thy ar ntrd in Engagmnt. I n t r v i w Tmp Prm F o r m Schdul M-3 Dcmbr Unitd Stats 17

18 M-3 linking from Engagmnt to Tax Whn M-3 is usd, FTJEs dtrmin Prm vs. Tmp, dpnding on how thy ar ntrd in Engagmnt. W o r k s h t Tmp Prm V i w Schdul M-3 Dcmbr Unitd Stats 18

19 Schdul M-3 How To for Engagmnt g M-3 Chckbox From within th trial balanc slct Engagmnt -> Account Groupings -> Options. Chck th M-3 box nxt to th ProSystm fx Tax grouping. This will add a column to th Tax Journal Entry (column ID 8) scrn to allow slction of T (tmporary), P (prmannt) or N/A (not applicabl) Tax yars whr th M-3 functionality is not supportd will not allow this box to b chckd. Group all accounts to th appropriat account groupings. Do not group any accounts to th M3 groupings Group offstting ntris for th Tax Journal ntris to th M1 groupings NOTE: If th prparr or rviwr is wanting to s th Schdul M-1 in th Tax rturn or California is on of th stats bing prpard whn Schdul M-3 is applicabl for th Fdral Rturn, th following is rcommndd to mak rconciling th Schdul M-1 asir. In Engagmnt, St th Snd to Tax option undr Account Groupings -> Advancd to NO In Tax, Forc th Schdul M-1 to print on: 1120 Worksht Gnral->Rturn Options->Procssing Options->Lin 7 (Form 2 box 33) 1120S Worksht Gnral->Rturn Options->Procssing Options->Lin 11 (Form 2 box 49) 1065 Worksht Gnral->Rturn Options->Procssing Options->Lin 15 (Form 2 box 44) In Tax, Snd th M-3 book/tax diffrncs to th Schdul M /1120S Worksht L/M->Schdul M-3->Gnral and Nt Incom (Loss) Rconciliation->Lin 4 (Form L-5 box 33) 1065 Worksht L/M-1/M-2/M-3->Schdul M-3->Gnral and Nt Incom (Loss) Rconciliation->Lin 4 (Form L-5 box 33) Schdul M-3 Dcmbr Unitd Stats 19

20 Schdul M-3 How To for Engagmnt g In th Account Groupings dialog, go to th Advancd scrn (mak sur that you hav th Tax grouping slctd) St th M-3 Option to th appropriat cod. Exampl C Corp, Officr s lif insuranc account should b groupd to a subgroup of Othr Dductions (26.xx) and thn you do a tax journal ntry to back out th non-dductibl portion. Sinc thr is a spcific lin itm on th Schdul M-3 for this, you would want to mak sur that on this Subgroup, you mark th M-3 Option to b for Officr Lif Insuranc Prmiums (cod 12). If you hav an itm lik Salaris and Wags that has to b brokn out on th Schdul M-3 but not th 1120, 1120S or 1065, With you can us th M-3 Option cod X (Exclud) to hav th amount go to th 1120, 1120S, 1065 but NOT th Schdul M-3. Thn you will thn hav to manually ntr th dtaild information for th Schdul M-3 on: 1120 Worksht Sch L/M->Schdul M-3->4. Othr Information-> lins 7 (Othr Incom Itms to Schdul M-3 Adjustmnt) and 8 (Othr Dduction Itms to Schdul M-3 Adjustmnt) (Intrviw Form L-8 boxs ) 1120S - Worksht Sch L/M->Schdul M-3->4. Othr Information-> lins 7 (Othr Incom Itms to Schdul M-3 Adjustmnt) and 8 (Othr Dduction Itms to Schdul M-3 Adjustmnt) (Intrviw Form L-8 boxs ) Worksht L/M-1/M-2/M-3->Schdul M-3->4. Othr Information-> lins 7 (Othr Incom Itms to Schdul M-3 Adjustmnt) and 8 (Othr Dduction Itms to Schdul M-3 Adjustmnt) (Intrviw Form L-8 boxs ) With 2007 You will b abl to group accounts to Subgroups of Salaris & Wags, M-3 Dtail grouping (C-Corp 13.02, S-Corp 08.02, Part 09.02) and this information will flow to th Tax rturn input forms and flow to th 1120, 1120S, 1065 AND Schdul M-3. Schdul M-3 Dcmbr Unitd Stats 20

21 Salaris Exampl with nw Engagmnt 5.0 and 2007 Tax I n t r v i w This is th subgroup summary tab in th Trial Balanc Ths ar subgroups cratd undr nw tax group for Salaris M-3 dtail F o r m Th M-3 Option cods can b st within Engagmnt in th Account Groupings > Advanc Schdul M-3 Dcmbr Unitd Stats 21

22 Salaris Exampl with nw Engagmnt 5.0 and 2007 Tax W o r k s h t V i w This is th subgroup summary tab in th Trial Balanc Ths ar subgroups cratd undr nw tax group for Salaris M-3 dtail Th M-3 Option cods can b st within Engagmnt in th Account Groupings > Advanc Schdul M-3 Dcmbr Unitd Stats 22

23 Schdul M-3 How To for Engagmnt Continud Tax Journal Entris Whn crating Tax Journal Entris, thr will b a nw column to dsignat that th journal ntry is ithr a T (tmporary), P (prmannt) or N/A (not applicabl). Th option for T (tmporary) or P (prmannt) will only b availabl for any groupings that xport to th Tax input forms whr thr ar all 4 columns for Amount, Tmporary, Prmannt and Book. Th option for N/A is NOT availabl for ths groupings. Th option for N/A is for all othr groupings. g Only groups that allow th transfr of Prmannt and Tmporary balancs will hav th T and P cods availabl for th accounts. Groups that do not support th transfr of ths balancs will auto fill th associatd accounts with N/A. Journal ntris ar cratd similarly to th M-1 journal ntry with a fw diffrncs Us a offstting account groupd to a M1 grouping (S slid 7 for othr mthods) Do on sidd (unbalancd) journal ntris. (NOTE: This is only for thos that do not want to crat any Tax grouping rports) Tax Softwar Intrfac Ensur that th viw slctd on th Tax Softwar Intrfac dialog includs th Fdral Tax Balanc column. Ensur th balanc slctd to transfr to Tax is Fdral Tax balanc. Schdul M-3 Dcmbr Unitd Stats 23

24 Schdul M-1 and M-3 Automatic Adjustmnts Hr ar th book/tax automatic adjustmnts that Tax has and th Engagmnt groupings to b usd. NOTE: Whn th book/tax automatic C Corporation Gain (loss) on disposition of assts adjustmnts ar usd, th Nt Incom/Loss amount in Engagmnt Us Engagmnt Groups Book amount will not match th Nt Incom/Loss pr th Tax Rturn. Tax amount - 09 Amortization Us Engagmnt Groups Book amount 26.02A Tax amount Dprciation Us Engagmnt Groups Book amount Tax amount -20 Dpltion (N/A 1120-RIC/REIT Us Engagmnt Groups Book amount 21A Tax amount -21 Th aras in Engagmnt that show th Nt Incom/Loss amount is Trial Balanc Databas TB Rports Quickviw Trial Balanc Snapshot A workpapr will nd to b cratd to show th Nt Incom/Loss pr th fdral tax balanc column. Th adjustmnts should thn b backd out or addd to show th tru Nt Incom/Loss pr th tax rturn. Schdul M-3 Dcmbr Unitd Stats 24

25 Schdul M-1 and M-3 Automatic Adjustmnts C Corporation Continud Bad dbt xpns Us Engagmnt Groups Book amount Tax amount - 15 Stat taxs Us Engagmnt Groups Book amount 17.01A Tax amount City/local l taxs Us Engagmnt Groups Book amount 17.07A Tax amount NOTE: Whn th book/tax automatic adjustmnts ar usd, th Nt Incom/Loss amount in Engagmnt g will not match th Nt Incom/Loss pr th Tax Rturn. Th aras in Engagmnt that show th Nt Incom/Loss amount is Trial Balanc Databas TB Rports Quickviw Trial Balanc Snapshot A workpapr will nd to b cratd to show th Nt Incom/Loss pr th fdral tax balanc column. Th adjustmnts should thn b backd out or addd to show th tru Nt Incom/Loss pr th tax rturn. Schdul M-3 Dcmbr Unitd Stats 25

26 Schdul M-1 and M-3 Automatic Adjustmnts S Corporation Gain (loss) on disposition of assts Us Engagmnt Groups Book amount Tax amount - 04 Amortization Us Engagmnt Groups Book amount Tax amount Dprciation Us Engagmnt Groups Book amount Tax amount - 14 NOTE: Whn th book/tax automatic adjustmnts ar usd, th Nt Incom/Loss amount in Engagmnt will not match th Nt Incom/Loss pr th Tax Rturn. Th aras in Engagmnt that show th Nt Incom/Loss amount is Trial Balanc Databas TB Rports Quickviw Trial Balanc Snapshot A workpapr will nd to b cratd to show th Nt Incom/Loss pr th fdral tax balanc column. Th adjustmnts should thn b backd out or addd to show th tru Nt Incom/Loss pr th tax rturn. Schdul M-3 Dcmbr Unitd Stats 26

27 Schdul M-1 and M-3 Automatic Adjustmnts S Corporation Continud Dpltion Us Engagmnt Groups Book amount Tax amount - 15 Stat taxs Us Engagmnt Groups Book amount 12.01A Tax amount City taxs Us Engagmnt Groups Book amount 12.04A Tax amount NOTE: Whn th book/tax automatic adjustmnts ar usd, th Nt Incom/Loss amount in Engagmnt g will not match th Nt Incom/Loss pr th Tax Rturn. Th aras in Engagmnt that show th Nt Incom/Loss amount is Trial Balanc Databas TB Rports Quickviw Trial Balanc Snapshot A workpapr will nd to b cratd to show th Nt Incom/Loss pr th fdral tax balanc column. Th adjustmnts should thn b backd out or addd to show th tru Nt Incom/Loss pr th tax rturn. Schdul M-3 Dcmbr Unitd Stats 27

28 Schdul M-1 and M-3 Automatic Adjustmnts Partnrship Gain (loss) on disposition of assts - Us Engagmnt Groups Book amount Tax amount - 06 Amortization Us Engagmnt Groups Book amount Tax amount Dprciation Us Engagmnt Groups Book amount 16A.01 Tax amount 16A Taxs Us Engagmnt Groups Book amount Tax amount - 14 NOTE: Whn th book/tax automatic adjustmnts ar usd, th Nt Incom/Loss amount in Engagmnt will not match th Nt Incom/Loss pr th Tax Rturn. Th aras in Engagmnt that show th Nt Incom/Loss amount is Trial Balanc Databas TB Rports Quickviw Trial Balanc Snapshot A workpapr will nd to b cratd to show th Nt Incom/Loss pr th fdral tax balanc column. Th adjustmnts should thn b backd out or addd to show th tru Nt Incom/Loss pr th tax rturn. Schdul M-3 Dcmbr Unitd Stats 28

29 Schdul M-3 - Tax Prparation Mak th ncssary manual ntris in th tax rturn and/or mak tax journal ntris in Engagmnt to chang data in th tax rturn. A fw of th manual ntris that nd to b mad on th tax rturn sid for Schdul M-3 ar Tax xmpt intrst incom (Worksht Incom/Dductions -> Intrst (Intrviw Form B-1, B-2 or B-3)) Othr Dduction Cod (Worksht Incom/Dductions -> Businss (Intrviw Form A-4)) (Currntly Engagmnt dos not import to this fild) This is an nhancmnt for Engagmnt v. 5.0 S slid 20 for mor information Othr Incom Cod (Worksht Incom/Dductions -> Businss (Intrviw Form A- 1)) (Currntly Engagmnt dos not import to this fild) This is an nhancmnt for Engagmnt v. 5.0 S slid 20 for mor information M-3 Option Cod (Currntly Engagmnt dos not import to this fild) S nxt slid for scrn shots This is an nhancmnt for Engagmnt v. 5.0 S slid 20 for mor information Schdul M-3 Othr Information (Worksht L/M -> Schdul M-3 -> Othr Information Sction 7 and 8 for Othr Incom and Dduction Itms to Schdul M-3 Adjustmnt (Intrviw Form L-8)) (Currntly Engagmnt dos not import to ths filds) This is an nhancmnt for Engagmnt v. 5.0 S slid 20 for mor information Schdul M-3 Dcmbr Unitd Stats 29

30 Schdul M-3 - Tax Prparation Unlss you ar on Engagmnt vrsion 5.0 or nw - Schdul M-3 Cod MUST b manually ntrd in th Tax Rturn Workshts/Intrviw Forms. Schdul M-3 Dcmbr Unitd Stats 30

31 Rclassifying Incom to Multipl Schdul M-3 lins in Tax Tax Prparation 2006 allows th ability to xclud an itm from th Schdul M-3 but still includ it on th 1120, 1120S or This is don by using th M-3 Cod box (dscribd in th prvious slid) in ithr th Workshts or Intrviw forms. This M-3 Cod box contains diffrnt cods to tll th lin itm how to flow to th Schdul M-3 or Exclud that lin itm compltly from th Schdul M-3. If th Exclud option is slctd, thn ntris would nd to b ntrd to crat th dtail statmnt on Worksht L/M -> Schdul M-3 -> Othr Information -> Sctions 7 and 8 for Othr Incom and Dduction Itms to Schdul M-3 Adjustmnt t (Intrviw Form L-8). For mor information on this, rfr to th Tax Schdul M-3 Exampls. With Engagmnt g 5.0 and Tax 2007, Usrs can now crat ths Dtaild Schdul M-3 Statmnts in Engagmnt and xport to Tax. Schdul M-3 Dcmbr Unitd Stats 31

32 Nw for 2007 Tax Yar Nw for Engagmnt for Schdul M-3 Addd nw Tax cods to C and S Corporations and Partnrships. M3 Dtail cods for Gross Rcipts/Sals Rturns & Allowancs Comp. of officrs Salaris & Wags Rpairs & Maint. Rnts Advrtising Employ Bnfits M3 Tmp and Prm option now availabl for Intrst Incom othr than US Gov t U.S. Gov t Intrst Incom Ths nw groups will allow usrs to crat subgroups for dtaild statmnts for Schdul M-3 within Engagmnt. This information will thn Export to th nw filds cratd in Tax for M-3 Dtail. Schdul M-3 Dcmbr Unitd Stats 32

33 Nw for 2007 Tax Yar Nw for Tax daling with Schdul M-3 Nw filds wr addd for M-3 Dtail on th following input forms C Corporation Worksht viw Incom/Dductions > Businss > 1. Incom > Lin 15 (Intrviw Form A-1 Boxs ) Worksht viw Incom/Dductions > Businss > 5. Dductions > Lin 16 (Intrviw Form A-4 Boxs ) S Corporation Worksht viw Incom/Dductions > Businss > 1. Incom > Lin 9 (Intrviw Form A-1 Boxs ) Worksht viw Incom/Dductions > Businss > 4. Dductions > Lin 15 (Intrviw Form A-4 Boxs ) Partnrship Worksht viw Incom/Dductions > Trad or Businss > 1. Gross Incom > Lin 12 (Intrviw Form A-1 Boxs ) Worksht viw Incom/Dductions > Trad or Businss > 6. Dductions > Lin 16 (Intrviw Form A-4 Boxs ) Ths filds will allow mor dtail statmnts for th Schdul M-3. Engagmnt has th nw Tax Cods for ths filds so that you can crat mor dtaild statmnts for ths itms on th Schdul M-3. Worksht viw Incom/Dductions > Intrst Incom (Intrviw Form B-1 now has Tmporary and Prmannt columns for Intrst Incom Dividnds is no longr locatd on this Intrviw Form B-1 Dividnds is now on Intrviw Form B-2. (Which Engagmnt dos not Import to) Schdul M-3 Dcmbr Unitd Stats 33