UltraTax CS Tax Codes: How Accounts Map to the Return
A tax code is a number assigned to a general ledger account that tells UltraTax CS which input screen and field the balance belongs to. The Tax Code Diagrams guide, published per return type, lists every code. Codes are assigned in the accounting application and carry forward, so the work is front loaded into the first year.
- Accounting CS or Trial Balance CS
- Chart of accounts
- Assign tax code to each account
| Trial balance account | UltraTax CS screen and field | Lands on |
|---|---|---|
| Gross receipts | Tax code to the income screen | Page 1 line 1a |
| Ending inventory, with COGS detail | Tax code 280 | Screen A, then Schedule L line 3 |
| Ending inventory, balance sheet only | Tax code 403 | Schedule L line 3 |
| Retained earnings | No code. Leave Screen L-2 fields blank | Schedule L and M-2 agree |
| Interest income | Tax code for the Schedule K item, not page 1 | Schedule K and K-1 box 4 or 5 |
| Distributions | Tax code to the M-2 section, not an expense | Schedule K line 16d |
| Depreciation expense | No tax code. The asset module computes it | Form 4562 |
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| Acct # | Account | Debit | Credit |
|---|---|---|---|
| 1000 | Cash | 42,800.00 | |
| 1200 | Accounts receivable | 68,500.00 | |
| 1300 | Inventory (the account this page is about) | 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 | 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 |
What a tax code is
A number on a general ledger account that names its destination in the return. Account 1000 Cash gets the code for the Schedule L cash line, and from then on its balance goes there every year without anyone deciding again.
That is a genuinely good design. It also moves the work rather than removing it: somebody has to decide, for every account in every new client's chart of accounts, which code is correct. That decision requires knowing the return, not just the account name.
The guide is the authority
The Tax Code Diagrams guide is published per return type and lists the code assignments. Reading it beats inferring from account names, because the same looking account can have more than one legitimate destination.
The clearest example is inventory. Code 280 sends ending inventory to Screen A, the cost of goods sold detail, and then on to Schedule L. Code 403 sends it to Schedule L only. Both are right in different situations, and picking the wrong one either double counts inventory in the cost of goods computation or leaves it out of it.
The codes that are easy to get wrong
Separately stated items. On an 1120S or 1065, interest income, dividends, charitable contributions and section 179 leave page 1 and belong on Schedule K. Coded to page 1 income or deductions, they overstate ordinary business income and misstate every K-1.
Distributions. Equity, not an expense. Coded to a deduction they reduce taxable income that they cannot reduce.
Retained earnings. The one place where the right answer is no code at all. Leave the Screen L-2 retained earnings fields blank and do not assign codes 467 to 470 to them, so Schedule M-2 and Schedule L agree.
Depreciation. Also no code. The asset module computes it and produces Form 4562, so a coded book figure deducts it a second time.
Production labor. On a manufacturer, factory wages belong in the cost of goods sold computation rather than in salaries and wages on page 1.
First year clients get no benefit
Codes carry forward, so year two onward is nearly free. Year one is the whole cost, and it falls on exactly the engagements where the preparer knows the least about the client's chart of accounts.
A firm onboarding business clients every season pays that cost every time, for charts of accounts that are nearly identical to the last client's.
Tax return treatment
| Form | Line |
|---|---|
| Form 1120 | Wherever the code points: page 1, Schedule L, Mc |
| Form 1120S | Page 1, Schedule K, Schedule L, Ms |
| Form 1065 | Page 1, Schedule K, Schedule L, M1M2 |
Common questions
What is a tax code in UltraTax CS?
A number assigned to a general ledger account that tells UltraTax which input screen and field the balance belongs to. Codes are assigned in the accounting application, carry forward year to year, and are listed in the Tax Code Diagrams guide for each return type.
Where do I find the list of UltraTax tax codes?
In the Tax Code Diagrams guide, published per return type by Thomson Reuters. It is the authority for which code sends a balance where, which matters because several codes can reach the same schedule by different routes.
Which accounts should not get a tax code?
Retained earnings is the main one: leave the Screen L-2 fields blank and do not assign codes 467 to 470, so Schedule M-2 agrees with Schedule L. Book depreciation is another, because the asset module computes the deduction and a coded book figure would deduct it twice.
Do tax codes carry forward to next year?
Yes, which is what makes the second and later years fast. The cost is concentrated in the first year of a client, when every account in an unfamiliar chart of accounts has to be assigned by somebody who knows the return.
Related answers
Go deeper
This page is the short answer. These articles work through the same ground in detail.
Last reviewed October 17, 2026.