How to Turn Off Autobalance in Drake Tax
For one return, go to the PRNT screen and check Reverse autobalance setup option. In Drake19 and earlier the box is labeled Turn off autobalance. To turn it off for every return, use Setup, Options, Calculation and View/Print tab, Turn off auto-balance of the balance sheet. Note 303 on the NOTES page tells you when autobalance has adjusted a return.
- Decide the scope
- For one return, open PRNT
- For every return, use Setup
- Recalculate and look at the NOTES page
- Now fix the real difference
- Open the return
- PRNT screen
- Reverse autobalance setup option
| Trial balance account | Drake Tax screen and field | Lands on |
|---|---|---|
| Autobalance, one return | PRNT, Reverse autobalance setup option | Stops the plug on this return |
| Autobalance, all returns | Setup, Options, Calculation and View/Print tab | Turn off auto-balance of the balance sheet |
| Where the plug lands on an 1120-S | Retained earnings | Schedule L line 24 |
| Where the plug lands on a 1065 | Partners capital | Schedule L line 21 |
| Evidence it happened | NOTES page in View/Print mode | Note 303 |
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Try it freeHow to Turn Off Autobalance in Drake Tax on a trial balance
| Acct # | Account | Debit | Credit |
|---|---|---|---|
| 1000 | Cash | 42,800.00 | |
| 1200 | Accounts receivable | 68,500.00 | |
| 1300 | Inventory | 55,000.00 | |
| 1500 | Equipment | 145,000.00 | |
| 1510 | Accumulated depreciation | 47,500.00 | |
| 2000 | Accounts payable | 28,400.00 | |
| 2100 | Accrued expenses | 9,200.00 | |
| 2400 | Notes payable | 92,000.00 | |
| 2450 | Due to shareholder | 15,000.00 | |
| 3000 | Common stock | 10,000.00 | |
| 3900 | Retained earnings (the account this page is about) | 86,300.00 | |
| 3950 | Shareholder distributions | 52,000.00 | |
| 4000 | Gross receipts | 612,000.00 | |
| 5000 | Cost of goods sold | 318,000.00 | |
| 6000 | Salaries and wages | 88,000.00 | |
| 6050 | Officer compensation | 72,000.00 | |
| 6300 | Depreciation expense | 21,500.00 | |
| 6900 | Other operating expenses | 37,600.00 | |
| Total | 900,400.00 | 900,400.00 |
Example journal entries
| Account | Debit | Credit |
|---|---|---|
| Balance sheet difference | 4,000.00 | |
| Retained earnings | 4,000.00 |
What it does
When assets do not equal liabilities plus capital, autobalance adjusts the balance sheet to make them agree. On an 1120-S the difference goes into retained earnings, line 24. On a 1065 it goes into partners' capital, line 21.
The result is a return where Schedule L ties and the underlying books do not. Nothing is flagged on the face of the return, and the figure that was plugged becomes next year's beginning balance.
Why to turn it off
Because the out of balance amount is the single most useful piece of diagnostic information available. Take the difference, search the trial balance for that exact number or half of it, and you usually have the missing account in under a minute.
Autobalance throws that information away. It is also why a return can pass review, get filed, and produce an unexplainable beginning balance a year later when somebody finally looks.
One more consequence worth knowing: while autobalance is active, the lines it adjusts cannot be entered directly in data entry. If retained earnings will not accept a figure, this is why.
Note 303 is the audit trail
Note 303 generates on the NOTES page in View/Print mode of an 1120, 1120-S or 1065 when autobalance has made an adjustment.
Worth building into a review checklist. A return with Note 303 is a return where Schedule L ties for a reason nobody has verified, and the amount of the adjustment is the amount of the error.
After turning it off
The balance sheet will now report the difference, which is the point. The usual causes, in the order worth checking:
- The beginning column was never entered, particularly beginning accumulated depreciation
- An asset was deleted from screen 4562 rather than marked as sold
- Inventory on Schedule A does not agree with inventory on Schedule L
- Amounts on screen L were changed or deleted
- Distributions were never entered
- Page 1 is incomplete, so computed net income is wrong
Tax return treatment
| Form | Line |
|---|---|
| Form 1120S | Retained earnings, Schedule L line 24 |
| Form 1065 | Partners capital, Schedule L line 21 |
| Form 1120 | Retained earnings on Schedule L |
Common questions
How do I turn off autobalance in Drake Tax?
For one return, check Reverse autobalance setup option on the PRNT screen. In Drake19 and earlier the box reads Turn off autobalance. For every return, use Setup, Options, Calculation and View/Print tab, Turn off auto-balance of the balance sheet.
How do I know whether autobalance adjusted my return?
Note 303 generates on the NOTES page in View/Print mode of 1120, 1120-S and 1065 returns when autobalance makes an adjustment. The amount it adjusted is the size of the underlying error.
Why does Drake say my balance sheet is in balance when it is not?
Because autobalance plugged the difference into retained earnings on an 1120-S or partners capital on a 1065. The schedule ties and the books do not, and the plugged figure becomes next year beginning balance.
Why will Drake not let me type in retained earnings?
Autobalance is active, and the lines it adjusts are locked in data entry while it is on. Turn it off on PRNT or in Setup, and the field becomes editable.
Related answers
Go deeper
This page is the short answer. These articles work through the same ground in detail.
Last reviewed October 17, 2026.