Has anyone found a better solution to show/report "net profit after tax & non-deductible expenses" than those suggested below? These appear clumsy and unnessecarily labor intensive!
Question: How are "non-deductible" expenses recorded and reported?
e.g.
- expenses incurred by a company but not allowed as deductions to calculate the taxable income (such as fines, some client or customer meals &/or entertainment, etc.) or
- personal expenses incurred by an individual
Current Answer:
Record them with the category of "Other Expenses" then manually add them back to the Net Income reported by QB to give the actual Taxable Income.
Authority (quotes & references):
Reference #1: GAAP Presentation
“In GAAP prepared financial statements, non-deductible expenses are not segregated from other business expenses on the Statement of Income and Expense. However, these non-deductible expenses must be added back to net income when calculating the income tax expense on taxable income.“
Source:
https://bizfluent.com/info-10029058-presentation-nondeductible-expenses-audited-financial-statements...
Reference #2:
"From a personal tracking point of view it's a good idea to reconcile the bank accounts, so you should not exclude transactions, as if you do, you can't reconcile. You can even:
categorize personal expenses, under "Other Expense" type accounts, and then the Operating Income in the P&L (which does not include "Other Expense" accounts) is the taxable income, before adjustments, like mileage.and
post business expenses as regular "Expense" type accounts"
Source:
https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/how-to-manage-personal-expe...
