Why Schedule L Will Not Balance in Lacerte
Take the out of balance amount and look for that exact number, or half of it, in the trial balance. Six causes account for almost all of it: the beginning column was never entered, beginning accumulated depreciation was omitted, ending retained earnings was typed rather than derived, distributions were never entered, page 1 is incomplete so computed net income is wrong, or it is a rounding difference of a dollar or two.
- Read the difference
- Search the trial balance for that number
- Check beginning accumulated depreciation
- Confirm page 1 is finished
- Verify the equity roll forward
- Remove overrides before adding more
- Detail
- Screen 29, Balance Sheet
- Assets or Liabilities and Equity
| Trial balance account | Lacerte screen and field | Lands on |
|---|---|---|
| Difference equals accumulated depreciation | Beginning column of screen 29 was never entered | Schedule L line 10b |
| Difference equals distributions | Screen 32, Schedule M-2 | Schedule K line 16d |
| Difference equals net income | Page 1 is incomplete, or retained earnings was typed in | Schedule L line 24 |
| Difference equals twice an account | A sign is reversed on that account | Wherever that account posts |
| Difference is $1 or $2 | Rounding. Stop looking | Not worth an entry |
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Try it freeWhy Schedule L Will Not Balance in Lacerte 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 (the account this page is about) | 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 | 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 |
Use arithmetic before re-reading
The instinct is to read every line again. The faster approach is to treat the difference as evidence.
Take the out of balance amount and search the trial balance for that exact figure. One large difference is usually one missing account. Then search for half of it: a difference equal to exactly twice an account balance means that account was entered with the wrong sign, so correcting it moves the balance sheet by two times the amount.
The six causes
The beginning column was never entered. Schedule L wants both columns. A new client with no proforma starts with nothing in the beginning column.
Beginning accumulated depreciation was omitted. The current year trial balance shows this year's depreciation expense, not the accumulated total at the start of the year. It has to come from the depreciation schedule or last year's return, and it is the single most common cause.
Ending retained earnings was typed rather than derived. Lacerte computes it from beginning equity plus income less distributions. An entered figure hides the disagreement that would have told you what was wrong.
Distributions were never entered. They belong on screen 32. If the difference equals the distributions on the trial balance, this is it.
Page 1 is incomplete. The balance sheet depends on the net income the return computes. Finish the income statement first, so that any remaining difference is genuinely a balance sheet problem.
It is rounding. A dollar or two is not worth an entry.
Clear overrides before adding another
Intuit's own balancing procedure for a corporate return is to go to the balance sheet screen, remove manual entries for ending accumulated depreciation, amortization and depletion, and compare the calculated figures against the worksheets before re-entering any correction.
That order matters. An override stacked on a calculated line produces a figure that is right in the preparer's notes and wrong in the return, and the next person to look at the file has no way to tell which is which.
Do not plug it
The temptation at the end of a long hunt is to force retained earnings and move on. The difference then becomes next year's beginning balance problem, and it will be harder to find because the trail is a year colder.
If the books genuinely do not balance, that is a conversation with the client, not an adjustment to the return.
Tax return treatment
| Form | Line |
|---|---|
| Form 1120S | Schedule L, page 4, with the equity roll forward on Schedule M-2 |
| Form 1065 | Schedule L, page 5, with capital accounts in item L of each K-1 |
| Form 1120 | Schedule L, page 5 |
Common questions
What is the fastest way to find a Schedule L out of balance in Lacerte?
Search the trial balance for the exact out of balance amount, then for half of it. One large difference is usually one missing account. A difference equal to twice an account balance means that account was entered with the wrong sign.
Why is my balance sheet out by the amount of accumulated depreciation?
Because the beginning accumulated depreciation was never entered. It does not appear on the current year trial balance, so it has to come from the depreciation schedule or the prior year return. It is the most common single cause of an out of balance Schedule L.
Should I enter ending retained earnings to make it balance?
No. Lacerte derives it from beginning equity plus income less distributions, and that calculation is what tells you where the problem is. Typing the figure in forces agreement and hides the cause, which becomes next year beginning balance problem.
Is a one dollar difference worth chasing?
No. Rounding differences of a dollar or two are normal. Spend the time on differences large enough to correspond to a real account, which is where the actual errors are.
Related answers
Go deeper
This page is the short answer. These articles work through the same ground in detail.
Last reviewed October 18, 2026.