Book to tax

Your books (what Bokapsys records) and your tax return don’t always agree. Some expenses are only partly deductible for tax, some not at all, and depreciation is usually worked out differently for tax. The changes a preparer makes to get from book profit to taxable profit are called book-to-tax adjustments.

The Book to tax pack gives whoever prepares your return everything they normally ask for from your books in one place, and points out the lines they will most likely change, with the reason for each. It doesn’t calculate any adjustment or any tax.

Before you start

You can see Tax → Compliance and its Book to Tax tab. Opening the pack depends on your role; see Team and roles.
The year’s books are complete: every statement mapped and posted (Mapping statements), every bank account reconciled to your year end (Reconciliation), invoices, bills and year-end journal entries entered.
Your accounts have clear names. The pack spots adjustments by account name, so an account called “Client meals” is caught while one called “Misc 2” is not. See Chart of accounts.
Contractors are marked for a 1099, and fixed assets are on the register, if you have them.

Open the pack

Go to Tax → Compliance and open the Book to Tax tab. The page is called Book to tax pack. You can also reach it with Open Book to tax on Tax → Filings → Business Income.
Pick the year with the buttons at the top right: this year, last year (selected when you open the page) or the year before.
The pack builds straight away. Work through it from the top (next section).
To hand it over, click CSV for a spreadsheet or PDF for a printable copy.

The pack covers your fiscal year as set in Company settings: 1 January to 31 December for most businesses, or, for example, 1 July 2025 to 30 June 2026 if your year starts in July. The dates are shown at the top. Payroll and contractor figures are always for the calendar year, because W-2s and 1099s follow the calendar year; when your fiscal year is different, the pack says so under those cards.

What’s in the pack

Section	What it shows	What to do with it
Summary	The period, a Books balance or Books do not balance badge, the basis line “These figures are the books as posted - accrual as recorded, nothing adjusted for tax.”, and Revenue, Cost of sales, Gross profit, Operating expenses, Operating income, Other income, Other expenses and Net income in the books	Check net income matches your Income Statement for the same dates
The trial balance does not balance	Shown only if total debits don’t equal total credits, with both totals	Fix this before you hand the pack over. A return built on unbalanced books will be wrong
Items to review: lines your accountant usually changes	Each flagged line: its name, the book amount, why it usually changes, and the accounts behind it	Your preparer decides the adjustment
Profit and loss by account	Every income and expense account for the year, grouped by section, with section totals	The detail behind the summary
Payroll	Employees paid, wages, any expense reimbursements (shown separately because they are not wages) and employer tax	Compare with your W-2s and 941s
Contractors	How many contractors are marked for a 1099, and how much they were paid	Compare with your 1099-NECs
Fixed assets	Assets on the register, their total cost, what was added this year, and a note that tax depreciation is normally recalculated	Your preparer works out tax depreciation
Trial balance at your year end	Every account with its Code, Account name, Category, Debit and Credit, with a total	The preparer’s starting point
What this is not	A reminder that this isn’t a return or a tax calculation, and is meant for whoever prepares your 1120, 1120-S, 1065 or Schedule C	—

Accrual here means income and expenses are recorded when they are earned or incurred, not when cash moves.

The trial balance is the one before closing: income and expense accounts show this year only, earlier years’ profit is rolled into one “Retained earnings - prior years” line, and year-end closing entries are left out. That is the shape a preparer expects.

The lines that get flagged, and why

Bokapsys reads the names of the accounts and categories on your Income Statement. Each account is matched to at most one of these, by its own name first and then by its category, so no amount is counted twice.

Flag	Account names it catches (examples)	Why the pack says it usually changes
Meals	Meals, Client meals	Business meals are usually only half deductible, and the rules change. Your accountant decides the split
Entertainment	Entertainment	Entertainment is generally not deductible at all, even when the meal alongside it is
Fines and penalties	Penalties, Fines	Fines and penalties paid to a government are never deductible
Charitable giving	Charitable contributions, Donations	A company deducts charitable gifts under its own limit, and a pass-through entity passes them to the owners instead
Federal income tax	Federal income tax, Income tax expense	Federal income tax isn’t a deductible expense on the return it’s being calculated for
Depreciation	Depreciation expense	The books use one depreciation method and the tax return usually uses another, so this figure almost always changes
Amortisation	Amortization	Like depreciation, the tax treatment of an intangible asset is normally not the book treatment
Owner and officer pay	Officer compensation, Owner draw, Director salary	How an owner is paid changes the return: a salary is an expense, a draw or distribution is not
Life insurance	Life insurance	Premiums on a policy where the company is the beneficiary are not deductible
Bad debts	Bad debt expense	A reserve for bad debts isn’t deductible. Only a debt actually written off is
Accrued expenses	Accrued expenses	A cash-basis return can’t deduct an expense that has only been accrued

If nothing matches, the pack says so and adds that this doesn’t mean no adjustment is needed, only that Bokapsys couldn’t spot one from the account names.

Worked example

The 2026 Income Statement has Client meals $2,400, Penalties $150 and Depreciation expense $8,000. The Items to review: lines your accountant usually changes card shows a count of 3 and lists:

Meals — $2,400, with the half-deductible reason, and the account Client meals: $2,400.
Fines and penalties — $150, never deductible.
Depreciation — $8,000, method usually differs.

Bokapsys stops there. Your accountant might, for example, deduct only half the meals and add back the penalty. Those decisions are theirs.

Hand the pack over

Make sure the badge reads Books balance.
Read the flagged lines. Where you know the facts (which meals were with clients, whether a payment to an owner was salary or a draw), write them down for your preparer.
Download the pack with PDF or CSV and give it to your preparer, along with your Balance Sheet and Income Statement from Financial reports, which you can export. If your accountant has access to your workspace, they can open the pack themselves; see My accountant.
Once the return is filed, record it on Tax → Filings → Business Income with Record a filed return. See Filing a return.

How to check it worked

Net income in the books equals net income on the Income Statement for the same dates.
The Payroll card’s wages match the year’s W-2 totals (see Payroll filings), and Contractors paid matches your 1099s.

Common problems

What you see	What it means	What to do
Books do not balance	Total debits and credits differ	Check for unbalanced journal entries in the General ledger, then rebuild the pack
An account you expected isn’t flagged	Its name doesn’t contain one of the words above	Rename the account to say what it is, or point it out to your preparer
No payroll this year	There are no posted pay runs in the calendar year	Expected if you have no employees
Could not build the pack	The pack couldn’t be built for that year; the message says why	Check your Income Statement loads for the year, then try again
The PDF could not be made.	The PDF export failed	Try again, or use CSV

Financial reportsIncome Statement and Balance Sheet.

Estimates and business taxesPlanning income tax during the year.

Chart of accountsClear account names make better flags.