Where do I record corporate tax paid on the income statement s125?

[subs]

Does the corporation tax paid go under operating expenses? If not, where does this get entered?

[TurboTaxJeffrey]

The taxes paid...are they for the corporate year end you are now preparing?

[subs]

Yes. But what about the previous year? Do corporate taxes paid get reported anywhere in the T2 return? What I'm having trouble with is when doing the year end adjustments in QuickBooks and adding in the corporate tax, it effects the retained earnings in the previous year (eg 2016) so when doing the return for 2017 the retained earnings on the balance sheet are out by the amount of tax paid. So the balance sheet doesn't balance!

[TurboTaxJeffrey]

for the current tax year you are completing, you would enter the balance sheet and income statements.  You then look to see what your tax payable is for that fiscal year...and enter two more entries.  One is taxes payable (liability) and the other is an expense (taxes owing).  On the S1 the taxes owing are added back into the income so that taxes are calculated on the proper income, however you would include the entry to your own books to account for taxes (Dr Taxes Payable, Cr Taxes Owing).  Any payments in the next fiscal year would be recorded to the liability.

[subs]

Thank you for your response.
When you say "enter the balance sheet and income statements" you mean take the items from QuickBooks and enter in S125 in TurboTax Inc. and I enter the assets and liabilities in the balance sheet in TurboTax Inc. I have done this. These all match up.

The problem comes in the Retained earnings/equity part.
This is the problem: when I put in the YE adjustments for corp tax in QuickBooks, it reduces the retained earnings by this amount (in QBs) but the retained earnings in TurboTax remain higher by the amount of tax. This is because the net income is higher in TurboTax because the corp tax expense has not been deducted like it has been in QBs.

So I can't get the net income and the retained earnings to match between QBs and TurboTax.
This is a bit complicated to explain and I don't know if I'm doing a very good job. Thank you.

[TurboTaxJeffrey]

Look at the last page of the T2...it will show you the amount of taxes due.  You will add this amount to what you entered.  One entry will be added to your G100 at line 2680, and the other entry will be added to line 9990 of the income statement.  You will also add that entry into your QB...as it will then be an accurate statement.  Have you not added the entries for taxes owed into TurboTax as well?

[subs]

Thank you!!! This was the part I was missing. You have made my day!

[TurboTaxJeffrey]

Glad to help.  If you take a look at this link, at the Schedule 1 form for corporate returns, you will see that the first line is adding back the amount shown as taxes owed...thus allowing the software to calculate the actual taxes and still allow for the company books to be accurate.
https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2sch1.html