99 – Estimated Income Taxes

Adjustments

 

Synopsis

Account 99

Debits

Credits

  1. The estimated federal, state, and local taxes due on the current year's taxable income.

  1. The total federal, state, and local income taxes due based on year-end adjusted earnings.

 

Remarks:

This account balance represents the estimated amount of federal, state, and local income taxes and should be determined and adjusted based on the current year-to-date earnings.

Each month-end federal, state, and local income taxes should be determined and adjusted by applying the current tax rates to the current year-to-date earnings.  The offsetting entry should be to Income Taxes Payable Account 327.

As with all income and expense accounts when closing the current year, the balance in this account should be transferred to Profit or Loss – Current Account 399.

Income tax deficiencies levied in the current year, but assessed against prior year's operations, should be charged to Retained Earnings, Account 370.

Note: