What it is
Schedule M-1 reconciles income per the books to income per the return. Each reconciling item needs support, and the schedule has to land on the return’s income line.
The workbook uses the Form 1120 Schedule M-1 layout. The other lines come from an itemized Detail tab where each item is tagged to a line and given a support reference. Line 10 is compared with income per the return. A Schedule M-2 tab rolls retained earnings and ties to Schedule L.
When to use it
- Preparing the return and its schedules.
- Reviewing book-tax differences before the provision.
- Supporting an audit of the tax accounts.
What’s inside
- M-1 lines 1 to 10 in the form’s order
- Detail tab for the itemized items on lines 4, 5, 7 and 8
- Tie-out to income per the return
- Schedule M-2 with Schedule L check
Standard cited
This template follows Form 1120 Schedule M-1. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
Which forms use M-1?
Form 1120, 1120-S and 1065 have similar reconciliations with different ending lines, and larger entities file Schedule M-3. Check the form for your entity and year.
What goes on line 10?
Income per the return before the net operating loss deduction and special deductions, in this layout.
Why itemize other items?
So every reconciling item has a description and a support reference.
Related templates
- Book-Tax Depreciation Difference Schedule (Excel)
- Rate Reconciliation Template (ASC 740)
- Income Tax Provision Workbook (ASC 740)
- Business Tax Return Review Checklist
Last updated 11/05/2026. All free templates.