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This is not a personal finance question, but I don't see a StackExchange site dedicated for business finance/accounting. So I'm asking it here.

I run a small business (LLC) and using QuickBooks for accounting. I filed the federal income tax return as "corporation", but I do not know in which account this should be recorded. I know income taxes are not considered expenses, but I do not know where to record this so as to tally the bank account and QuickBooks. Any help or pointers is appreciated.

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up vote 2 down vote accepted

Federal income taxes are indeed expenses, they're just not DEDUCTIBLE expenses on your 1120. Federal Income Tax Expense is usually a subcategory under Taxes. This is one of the items that will be a book-to-tax difference on Schedule M-1.

I am presuming you are talking about a C corporation, as an S corporation is not likely to be paying federal taxes itself, but would pass the liability through to the members. If you're paying your personal 1040 taxes out of an S-corporation bank account, that's an owner's draw just like paying any of your personal non-business expenses.

I would encourage you to get a tax professional to prepare your corporate tax returns. It's not quite as simple as TurboTax Business makes it out to be. ;)

Mariette

IRS Circular 230 Notice: Please note that any tax advice contained in this communication is not intended to be used, and cannot be used, by anyone to avoid penalties that may be imposed under federal tax law.

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