Cuyamaca College Taxes and Needs Assistance Presentation

Scenario: Client is preparing their company taxes and needs assistance with preparing book-to-tax reconciliation.

Questions: What is book-to tax reconciliation? Why does it need to be practiced? Explain common adjustments and how it affects the client’s taxes.

Basic Idea for Presentation:

• Present to client adjustments that need to be made for book-to-tax reconciliation.
• For specific items (i.e. insurance, interest income, etc) describe how each item will be adjusted. Identify and explain how the adjustments affect book and tax balance.
  • What makes an adjustment Favorable/Unfavorable
  • What makes an adjustment Temporary/Permanent
    • If temporary, what makes it temporary, and how will it affect the balance in the future

– What are book-to-tax adjustments? And what is its purpose? Why is it important for these adjustments to be accurate

– What are the four common items of adjustments?

• How is the reconciliation done?
• Are book-to-tax adjustments important?
• How would the insurance be adjusted and how would it affect the book and tax balance?

Explain what a book-to-tax reconciliation is (its purpose) and why it is important to practice when preparing taxes.

• Book-to-tax reconciliation: adjustments from income on books to income reported on tax return. (adding and subtracting non-tax items)
• Why do we need to make adjustments

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