I am the club treasurer. I say that with humility . I
incorrectly entered some BI magazine subscription deposit
money as income.....I think because I was trying to avoid
Suspense. I have had frustrating experiences with Suspense.
I know, I know , it's simple. Not for me. Anyway, i was
not able to change the incorrect entry and shook it off as
minor. Nothing is ever minor , is it?

Now that i have sent off my taxes to the iRS and the k-1's
to the partners, my husband is doing our taxes and this has
come back to haunt. this incorrectly placed $125 now appears
as $9 and some change in box 11, with an 'A' nearby.

the tax software is asking for special treatment of this
"other" income that doesn't seem to fit anywhere. What
should I do? Should I inform everyone of my mistake and
have their tax people note a bookkeeper's error? I went
back more than once trying to change the entry but it will
not let me.

I am inclined to call it a lesson, and I will learn to use
Suspense properly. How should the partners' tax people
label it? If it had been properly entered, it would not
appear as anything at all.

What is customary?

deannie

Deannie Rule wrote:
> I am the club treasurer. I say that with humility . I
> incorrectly entered some BI magazine subscription deposit
> money as income.....I think because I was trying to avoid
> Suspense. I have had frustrating experiences with Suspense.
> I know, I know , it's simple. Not for me. Anyway, i was
> not able to change the incorrect entry and shook it off as
> minor. Nothing is ever minor , is it?
>
> Now that i have sent off my taxes to the iRS and the k-1's
> to the partners, my husband is doing our taxes and this has
> come back to haunt. this incorrectly placed $125 now appears
> as $9 and some change in box 11, with an 'A' nearby.
>
> the tax software is asking for special treatment of this
> "other" income that doesn't seem to fit anywhere. What
> should I do? Should I inform everyone of my mistake and
> have their tax people note a bookkeeper's error? I went
> back more than once trying to change the entry but it will
> not let me.
>
> I am inclined to call it a lesson, and I will learn to use
> Suspense properly. How should the partners' tax people
> label it? If it had been properly entered, it would not
> appear as anything at all.
>
> What is customary?
>
> deannie

When a member pays the club to pay their personal BI
membership it can result in a situation like yours. This is
not income to the club, and when it is entered as income
(even Income to suspense) the tax program picks it up and
enters it on Line 11 of the tax return. But you know this.

My suggestion is start again by entering the payment from
the members as a TRANSFER from suspense to your checking
account in the amount paid. Document what this is in the
Remark box. This will result in a correct checking account
balance and there will be a negative value in suspense.

To document your check to BI, make another TRANSFER, this
time from checking to suspense. Again your checking account
will be correct and suspense will be zeroed out.

Once these entries are made you need to delete the Income
and expense transactions which you have replaced. Your
should also rerun your club tax return and give an updated
K-1 to each of your members. Since you have already sent in
your club return, this is an Amended return. According to
IRS rules this amended return should be filed and each of
your club members should use this K-1 for their personal
returns.

In the future, to avoid this bookkeeping the recommendation
is that each member pay their BI dues individually, or give
the club a check to BI for the club to send to BI. In other
words, keep personal expenses out of the club.

Dave Swierenga
bivio support