USA 1120 prepaid taxes on Balance Sheet

[Kenneth]

In the beginning, I credited cash and debited prepaid taxes when making my 1/4ly tax payments.
1120 Tax balance on Balance Sheet still remains when taxes are paid; why does the amount still appear on the balance sheet? What do I credit following filing my tax return indicating that the amount has now been used?

 

[smallbushelp]

The prepaid balance still appears on your balance sheet because you haven't expensed it yet. So when you file your return, debit tax expense and credit prepaid taxes. In the future however, don't post the payment to a prepaid account; just expense it as paid. The reason is because you are making payments in the current period for tax liability that is being incurred in the current period.