How to record DTA for accrued board fees
Recording a deferred tax asset for Board of Director fees that are accrued at year-end but are not deductible for tax purposes until the following year when paid.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Deferred Tax Asset | Asset | 3,500.00 | - |
| Deferred Tax Benefit | Revenue | - | 3,500.00 |
💡 Accountant's Note
Under Section 404 of the IRC (and similar global rules), compensation and fees paid to non-employees are often not deductible until the year of payment if paid more than 2.5 months after year-end.
Practitioner & Systems Framework
💻 ERP Architecture
Track director fees in a specific liability account to ensure they are picked up in the tax provision workpaper.
⚠️ Audit Flags
Payments to directors that fall outside the 2.5-month window after year-end.
📄 Required Documentation
Board minutes, accrual schedules, and 1099-NEC or equivalent payment records.
Automate this entry with the JEH Accounting Suite
Stop doing manual entry. Our VBA-powered ERP automatically generates your ledgers, Trial Balance, and Financial Statements.
No Subscriptions. Own your data.
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
Related Journal Entries
Discussion & Community Questions
Loading comments...