How can I correct error after closing the year and taxes filed?

txlabradors1 · ‎November 26, 2020

Good afternoon,

I am hoping someone can help me. I have entered a loan payment in 2019 ( it was automatically set up) for a property mortgage. The property was transferred, and this last payment was never made, but I did not notice when doing the last bank reconciliation that it was still sitting there, and it remained as uncleared check in the register. Hence, when I ran the year end report for the CPA to do the taxes, this outstanding check reduced the cash on hand balance on the balance sheet I gave him. He prepared the taxes, and I noticed the error months later, way into 2020. I just deleted the erroneous payment from the register so that is well, but now my book balance does not match the book balance that was on the taxes. But now the balance is off by the 1900 ( monthly payment..) The payment was not booked as an expense or anything but the balance sheet on taxes does not match the books. The building was transferred in 2019 from an SCorp to another SCorp ( same owner) with no money exchanging hands so there was a loss and the transfer shows as distribution to owner. How can I correct this difference, I imagine it would be a journal entry.. so I can start the 2020 year without the error? Thank you so much for your help.

Gina

john-pero · ‎November 27, 2020

Let's start with some basics of what you shoukd have done.

1. You should have created an accountant copy file for the CPA for them to work directly with during which time your prior year remains closed to you changing data before the close date. Your CPA would then send you a change fike to import any chnages they made. If your current CPA does not use quickbooks you should shop around.

2. You should have left the prior payment in place and made an adjusting journal entry in the current year. One offsets the other and deleting is not appropriate after the books are closed for the period

Therfore i suggest you recreate the payment with original date from last year. Then enter a journal entrynfor any date in 2020 that auits and that reverses the payment. The two will offset each other in your next reonciliation

txlabradors1 · ‎November 27, 2020

2. You should have left the prior payment in place and made an adjusting journal entry in the current year. One offsets the other and deleting is not appropriate after the books are closed for the period

Therfore i suggest you recreate the payment with original date from last year. Then enter a journal entrynfor any date in 2020 that auits and that reverses the payment. The two will offset each other in your next reonciliation

Thank you so much. I figured it was a mistake thank you for confirming so I will reenter that. But I don't know what that journal entry should be. I cant' just reverse the payment, because the property is gone.. and so is the note against the property, which this check was supposed to be a payment on.... the property is off the books, it was transferred in early 2019 ( February)....

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How can I correct error after closing the year and taxes filed?

How can I correct error after closing the year and taxes filed?

How can I correct error after closing the year and taxes filed?

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