C- Corp question

[Cyclone]

The majority of the Corp returns I do are S-Corps and I am working on a 2013 C-Corp return which I am not as fluent with.

 

The C-Corporation owed income taxes for 2012 and paid them in 2013 from the business bank account.  No estimates were paid by the C-Corp for 2013..

 

The client had entered the C-Corp prior year income tax payments into Quickbooks as a deduction.   The Corp made over $250,000 so I have to complete the Sch L, M-1, and M-2.  

 

Since I do not believe the Federal and State tax payments for the previous year are deductible by the C-Corp should I enter it in as a non-deductible expense on the Sch M-1 so the balance sheet items will tie with Quickbooks?   Just to confirm, prior year C-Corp state tax payments are NOT deductible on the Federal C-Corp return like they are for individuals are they?

[TomS]

Assuming the Corp is cash basis.....

The Fed tax paid is a Sch M reconciling item (nondeductible)

The State tax paid is deductible on the Fed return

[kcjenkins]

STATE [and local if applicable] Income taxes ARE deductible business expenses of a C Corp.  Just like payroll taxes, property tax, etc.

[Cyclone]

Thank you for the help  Tom and KC!!!

[kcjenkins]

You are welcome.

[michaelmars]

YOU will probably have to add them back to income on the state return as an adjustment.  As for the M-1 adjustment for federal tax, there is a line item as to where to enter it.  Other common M-1 adjustments are for excess contributions, and 50% of entertainment expenses