Matching accounts to tax lines

A tax line says where an account's totals go on the return. For example, "Schedule C, line 8" is advertising for a US sole proprietor. Each income and expense account should have one.

Why it matters

Totals for a return are built from the tax lines, not from account names. An account without a tax line is left out of the return's figures and is listed apart. The month-end checklist also flags accounts used in the month that have no tax line.

Assigning a tax line

1. Open the chart of accounts in the Accountant view.
2. Open the income or expense account.
3. Choose or type the tax line, such as "Schedule C, line 8". Use the wording from your return or your accountant's list.
4. Save. The change is recorded in the edit history with the old and new values.

Balance sheet accounts such as cash, loans and capital do not need a tax line for the return.

The tax-line report

The tax-line report groups income and expenses for a period by tax line. Each group shows the totals and the accounts in it. Accounts with no tax line appear in a group called "No tax line chosen", with a count. Work through that group until it is empty.

What the product checks

• Filling Schedule C from the books reads Schedule C lines only. Any other tax line is listed as not used, so nothing is dropped without notice.
• The month-end checklist shows "Accounts are matched to tax lines" as advice, not as a block.

Tips

• Set tax lines when you create the account, not at year end.
• If a line is wrong, change the account's tax line. The change stays in the edit history. Do not move entries to another account just to change the line.