Strategic S Corp Tax Preparation Services

There isn't one right answer. What matters more than the tax software is the bookkeeping system feeding it. If QuickBooks Online or a similar platform is set up properly, with payroll, shareholder distributions and loans recorded in the right accounts, the 1120-S almost prepares itself. Software can't tell you whether an owner's salary is reasonable or whether a distribution exceeded basis, though. That still takes a person who understands S corporation rules.

Generally, the corporation itself doesn't pay federal income tax. Profit, losses, deductions and credits flow through to the shareholders on Schedule K-1, and each owner reports their share on a personal return, whether or not the cash was actually distributed. Some states do tax S corporations at the entity level, and things like basis limits and the type of income can change the result, so the K-1 is only the starting point.

Form 1120-S, the U.S. Income Tax Return for an S Corporation. It's due on the 15th day of the third month after the tax year ends, which is March 15 for calendar year companies, and an extension is available with Form 7004. Along with the return, the company issues a K-1 to each shareholder. Missing the deadline triggers a penalty calculated per shareholder for each month the return is late, so it adds up quickly.

If you work in the business, yes, in most cases. The IRS expects shareholder employees to be paid reasonable compensation through payroll before taking distributions. What counts as reasonable depends on your role, hours, experience and what someone else would be paid to do the same job. Setting salary too low to cut payroll taxes is one of the most common S corp audit issues, so we help you pick a figure you can support with documentation.

Your year end profit and loss and balance sheet, bank and credit card reconciliations, payroll reports and W-2s, records of equipment or vehicle purchases, loan statements, and a list of what each shareholder put in or took out during the year. Last year's return is helpful too. If the books aren't reconciled yet, tell us early. Fixing them after the fact takes longer than the return itself.

Yes, as long as they're ordinary and necessary for the business and documented. Wages, rent, software, insurance, professional fees and legitimate business travel are typical. Where S corp owners get into trouble is mixing personal spending into the company account or paying themselves back without an accountable plan. We'll flag anything that looks shaky before it goes on the return.

Ideally in January, as soon as December's books close. That leaves time to reconcile accounts, confirm payroll matches what's on the W-2s, review shareholder loans and distributions, and track down missing paperwork. Companies with several owners, an ownership change during the year or a big asset sale should start even sooner, because those items take extra work to get right.

Yes. We can rebuild records for the missing years, prepare the late 1120-S returns and K-1s, and request relief from late filing penalties where there's a basis for it. If the owners' personal returns now show a balance due, our Enrolled Agent can handle the tax resolution as well, including an installment agreement if needed. Waiting tends to make the penalties bigger, so it's worth starting now.