Client Data Screen

The client data screen contains all the general information about the organization.  Complete it as carefully as possible.  Information entered on this form will automatically populate into other forms as they are added to the return.

Business Information

Provide the date of organization or incorporation, and the state in which the entity was formed. The complete listing of NAICS codes is available by pressing F3 on the applicable field; selecting the appropriate NAICS code will automatically complete the principal business activity, but the principal product or service must be provided. The service center where filed will automatically complete based on the address information provided, as well as certain financial data in the return.

The fiscal year beginning and ending should only be completed for a fiscal year filer (one whose tax year beginning is something other than January 1st, and whose tax year ending is something other than December 31st).

The accounting method must be provided for all filers. The accounting method detail is applicable only to Schedules M-3 (Form 1120, Form 1120S, and Form 1065), and to Schedules K-1 (Form 1065), and should be provided for returns where these forms are present.

Initial, final, amended, and name or address change indicators will carry throughout both federal and state returns. The custodian and location of books and records for this entity should be provided, and will carry through to all states that request the information. If the custodian is the same as the officer whose information was provided in the general information, checking the box will populate the name fields with the officer’s name. If the location of books and records is the same as the address provided in the general information, checking the box will populate the address fields with the entity’s address.

Return Options

If the organization operates in a state that requires the filing of Schedules L, M-1, and M-2, check the box to force the completion of these schedules (note that Schedule M-2 is always completed for Form 1120S filers). This will supersede the federal rules for filing these schedules.

Check the box to load the apportionment worksheet if the organization has sales, payroll, or property in more than one state. This box also determines whether state apportionment or allocation schedules will automatically complete.

If the entity’s information is sufficiently known to enable answering the Other Information schedules of Form 1120, Form 1120S, and Form 1065, checking the box to answer “No” to these questions will allow all these questions to be answered at once. These answers can still be changed on the respective forms if necessary.

The tax information entered in the Asset Manager pertaining to basis and current/accumulated depreciation and amortization can be used to complete the income statement and balance sheet. This information will also be used to complete lines relating to auto expense and asset sales. Basis and sale information pertaining to land can also be tracked in the Asset Manager by checking the separate applicable box

If the entity is electing to apply the safe harbor concepts outlined in T.D. 9636 pertaining to the deduction or capitalization of expenditures relating to tangible property, it may be considered a change in accounting method. If so, checking the box in this section will automatically add Form 3115 to the return.

Form 1065 and Form 1120S filers with rental property can either enter their rental income and expense on the Income Statement using the appropriate codes, or directly on Form 8825. Form 8825 direct entry should only be used if there is no difference between the rental income or loss recorded on books and the rental income or loss to be reported to the IRS.

Change Entity Type

CrossLink allows you to export a business tax return from one entity type to another. To do this, from the Return menu on the file bar at the top left of CrossLink, select “Change Entity Type”. On the dialog box that appears, select the new entity type for which you wish to create a return and select “OK”. A confirmation window will appear when the export is completed; select “OK” and exit the return to the “Select a Return” screen. CrossLink retains both the original return and the return using the new entity type; refresh your list if necessary and navigate to the version of the return you wish to open and select it to access the new return.

All data in the General section of the Attached Forms list will transfer to the new return. Basic owner information entered in the K-1 manager will transfer, but ownership percentages and basis information must be reentered. Depreciation information will transfer as well, but assets may need to be reassigned if an activity under one entity type is no longer applicable under a different entity type. Information entered on federal forms that are common among entity types will also transfer. Worksheets and statements that are automatically populated from data in the General section of the Attached Forms list will load into the return when you access the applicable parent form(s). Information entered on entity-specific forms and on state forms does not transfer and will need to be entered on the new entity-specific forms if still applicable. States will be removed from the return for the new entity and the applicable states should be loaded into the return after adjusting federal data to accommodate reporting rules for the applicable entity type.

QuickBooks Import Instructions

Review Tax Line Mapping in QuickBooks

Begin by reviewing the tax-line mapping associated with each account in the Business’ QuickBooks Chart of Accounts. CrossLink will enter the imported amounts on specific lines of the Income Statement and Balance Sheet based on the Tax-Line Mapping for each account, therefore only those Tax-Line Mappings supported by CrossLink should be used. Refer to the CrossLink Tax Line Mapping Table to ensure your data flows to the appropriate lines in the CrossLink tax return.

Tax-Line mapping can be assigned by editing each account type by selecting Company, then Chart of Accounts. Once in the Chart of Accounts, select the account you wish to edit, and click Account then Edit Account from the bottom left. This will open the Edit Account dialog box. Select the appropriate tax-line mapping from the pull-down list or you may follow these steps:

Enter the Report Center in the QuickBooks company file

Choose the List Reports

Open the Account Listing Report. This report shows the accounts from the Chart of Accounts and the Tax Line associated with each account.

To change the Tax Line associated with an account, double-click on the data in the Tax Line column. This will open the Edit Account dialog box. Choose the appropriate tax-line mapping from the Tax-Line Mapping pull-down list. Once the desired tax line is chosen, click Save & Close. You can then move to the next account in the report that requires a change and repeat the process.

Create the File Used for Import into CrossLink

Once you have reviewed the tax-line mapping and made any corrections necessary, return to the Report Center to create the file for CrossLink import. Choose the Accountant & Taxes reports. Open the Income Tax Preparation report for the tax year for which you are filing the tax return. Create the .csv file for import into CrossLink.

If there is an “Export” button at the top of the report, click it. Select the option for a comma separated values (.csv) file. Click Export. Save the exported .csv file to the location of your choice.

If there is no “Export” button, print the report to file. Click “Print” at the top of the report. Select “File” and “comma delimited file”. Click Print. Save the .csv file to the location of your choice.

Import Data into CrossLink

The data from the consumable report you created can now be imported into the CrossLink Business return to populate the Balance Sheet and Income Statement. Open the return in CrossLink. From the Return menu on the file bar at the top left of CrossLink, select “Import Financial Data.” Check “Yes” to clear any previously entered Balance Sheet and Income Statement data and import the selected financial data. A dialog box will appear where you will choose the file for import. Locate the file you created in the prior step and click “Open”.

If an error appears, review the data file you created. The first column should be the tax period, Jan-Dec 12 for example. The second column should be titled “Account Type” and contain the type of account. The third column should be titled “Account” and contain the name of each account. The fourth column should be titled “Amount” and contain the dollar amount. The fifth column should be titled “Tax Line” and contain one of the tax line mappings from the CrossLink Tax Line Mapping Table. Make adjustments as necessary and repeat the steps above.

The data in the imported file will flow to the locations indicated in the CrossLink Tax Line Mapping Table automatically. Note that adjustments may be required when CrossLink has predefined lines on the Financial Statements for ease of entry on the tax return, but a corresponding tax-line mapping is unavailable. For example, “Other income” on the CrossLink Income Statement includes a predefined line for “Income or loss received from a pass through entity,” but no corresponding tax-line map is available. Therefore, income or loss received from a pass through entity would be given the tax-line mapping of “Income: Other income” and would be entered in the table under line 8h of the CrossLink Income Statement when imported. You would need to transfer the amount of income or loss received from a pass through entity to line 8e and delete the related line from the 8h table to ensure the amount flows to the appropriate line on the tax return. Additionally, due to tax-line map limitations, all equity/capital information must be manually entered on the Balance Sheet. Don’t forget to choose the appropriate code from the list for each item in the tables for Other Assets and Other Liabilities on the Balance Sheet and Other Income and Other Deductions on the Income Statement.

CrossLink Tax Line Mapping Table

Financial Statements

The completion of the Financial Statements is required. They are designed to improve the speed and accuracy of entry of the organization’s income and expenses per books and balance sheet data. The data can be manually entered based on the organization’s financial records or by importing the data from QuickBooks; See the QuickBooks Import section for more information. Complete these statements carefully, as the data entered will flow to the federal and state returns as appropriate. Not all lines apply for all return types. Any amounts entered in the “Other income or loss not recorded above” or “Other deductions or adjustments not listed above” tables must be classified with one of the codes from the lists provided. Worksheets for tax exempt interest income and state income tax expense are included, and can be accessed from the respective entries to allocate the amounts to the respective state. A worksheet for entering federal tax payments is included, and can be accessed from the entry for federal income tax expense to record payments made. A worksheet for other costs included in cost of goods sold can be accessed from the “other expenses attributable to cost of goods sold” entry for itemization of each cost.

Rental income or expense for partnerships and S corporations can be entered on the Other Income or Other Deduction sections of the Income Statement using the appropriate codes (if not entering directly on Form 8825). Select Code 11 (Income) or Codes 18 through 29 (Deductions), and assign a rental property number (01 through 99). The information for each property will then total to the applicable column of Form 8825.

Note that if entering rental income and expenses directly on Form 8825 instead of the Other Income and Other Deduction sections, the total net rental income excluding depreciation, amortization, and auto expenses will appear on line 4c of the income statement. This enables accurate completion of Schedule M-1 for Form 1120S and Form 1065 filers.

Multistate Allocation and Apportionment Information Worksheet

Use this worksheet if the organization operates in more than one state. Federal amounts are calculated from the Financial Statements where possible. When categories listed are subcategories of amounts that can be calculated from the Financial Statements, manually entered amounts may be subtracted from the general amount calculated from the Financial Statements. State amounts are calculated from the State Property Factor Information, State Payroll Factor Information, and State Sales Factor Information worksheets. On these worksheets enter the state abbreviation, choose the code that applies, and enter the amount. The information provided here will be used in calculating state allocation and apportionment.

K-1 Manager

The K-1 Manager is a central location for all federal and state K-1 or K-1 equivalents. The first K-1 is provided automatically. To add an additional K-1, click the “Add” button. A state K-1, or equivalent, will automatically be created for each federal, if applicable. To delete a K-1, select the line of the desired K-1 in the table, then click “delete”. Deleting a federal K-1 will also delete its state counterpart. To view a specific K-1, choose “Federal” or the appropriate state on the left, then double-click on the line for the desired K-1 on the right.

Schedule N (Form 1120)

Use Schedule N (Form 1120) to provide information about assets and/or operations in foreign countries or U.S. possessions. Additional forms may be required based on the answers to the questions on Schedule N.

Form 966

Use Form 966 when the corporation has adopted a resolution or plan to dissolve itself or liquidate any of its stock. Note that Form 966 is not electronically filed. It should be completed, printed, signed, and mailed to the appropriate IRS Service Center.

Form 1125-A

Use Form 1125-A to calculate the deduction for cost of goods sold. Most amounts flow from the Income Statement and Balance Sheet. Worksheets are available for explaining any difference between beginning inventory for the current year and prior year closing inventory, additional section 263A costs, and other costs.

Form 1125-E

Use Form 1125-E for certain entities with total receipts of $500,000 or more to provide a detailed report of the deduction for compensation of officers.

Form 2220

Use Form 2220 to figure the amount of any penalty owed due to underpayment of estimated tax. Form 2220 is not actually required to be completed and attached to the return unless the filer meets one of the conditions listed in Part II – Reasons for Filing. However, Form 2220 can still be filed if the corporation wishes to figure the penalty at the time of filing. If Form 2220 is not attached, the IRS will figure any applicable penalty and bill the corporation.

Required Annual Payment

Part I is used to determine the amount of estimated tax that should have been paid during the tax year in order to avoid a penalty. If the amount underpaid for the current year is less than $500, there is no penalty. If the corporation had no tax in the prior year or the tax year was less than 12 months, override the required annual amount to reflect current year tax minus any applicable credits.

Figuring the Underpayment

Estimated tax paid or credited should be entered on the worksheet provided on the line for federal income tax expense in the Income Statement.

Figuring the Penalty

Form 3115

Use Form 3115 to request a change in accounting method overall or for a particular item. If filing under automatic change request procedures, file this form with the timely filed tax return (including extensions) for the year of the change. A copy of this from must be sent to the IRS National Office after the start of the year of change but before the original is filed with the tax return. If filing under advance consent request procedures, file this form with the IRS National Office as early as possible during the year of the change.

Form 7004

Use Form 7004 to request an automatic extension of time to file certain business income tax, information, and other returns. The extension will be granted if this form is completed properly and is filed by the due date of the return to which it applies, and if a proper estimate of the tax is made, if applicable. Form 7004 does not extend the time to pay any tax due, if applicable. This form grants a 5 month extension for filing Form 1065; Forms 1120 and 1120S are extended by 6 months. The IRS will provide notification if the extension is disallowed, and the IRS may terminate the extension at any time by providing notice.

Form 8050

Use Form 8050 to request direct deposit of any refund associated with the current year’s tax return. If banking information has been entered on the Client Data Screen, it will flow here automatically, but different bank information can be entered if desired.

Form 8082

Use Form 8082 to notify the IRS of any inconsistency between your tax treatment of an item and the way the pass-through entity treated and reported the same item on its return. This form is also used to notify the IRS if you did not receive Schedule K-1, Schedule Q, or a foreign trust statement from the foreign trust by the due date for filing your return (including extensions).

Form 8716

Use Form 8716 to elect under section 444 to have a tax year other than a required tax year. This form may be filed by partnerships, S corporations, and personal service corporations.

Form 8822-B

Use Form 8822-B to notify the IRS of a change in the business mailing address or location. It generally takes 4 to 6 weeks to process the change. This form must be mailed to the IRS at the address indicated on the form.

Form 8825

Use Form 8825 to report rental real estate income and expenses for a partnership or S corporation. The income and expenses will flow from the Income Statement. Amounts passed through will flow from the K-1(1065). Complete the address, property type, and use days for each property. A worksheet listing each property description, the code, and the net gain or loss is generated for Schedule K, and it will include any properties listed on the Net Rental Real Estate Income (Loss) worksheet on K-1(1065).

Form 8832

Use Form 8832 to elect how the business will be classified for tax purposes. If the business is a new eligible entity and will be using the default classification, do not file this form.

Form 8916-A

Use Form 8916-A as a detailed schedule of cost of goods sold, interest income, and interest expense reported on Schedule M-3.