Tax filing for S-Corp with 0 income with minor expenses.

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Tranfinity
Tranfinity Member Posts: 2 Newcomer

I am fully employed on W2 and filed personal taxes, disclosed some expenses incurred for formation of the s-corp, so included 1040 Schedule C.

Should I file for 1120s separately still ?

and show 0 income and 0 losses? since all expenses were deducted on my personal taxes?

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  • RyanZ
    RyanZ FreeTaxUSA Agent Posts: 70
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    If I understand you correctly, you formed a Corportation that is registered with a state, filed the form 2553 - Election by a Small Business Corporation AND RECEIVED an ACCEPTANCE LETTER FROM THE IRS (caps used for emphasis).

    If this is correct, then you are NOT allowed to report that on your schedule C, because it is required to be reported on the form 1120-S - U.S. Income Tax Return for an S Corporation. There are specific instructions from the IRS about filing and wage reporting requirements in the letter you received from the IRS accepting your S-Election being approved.

    Please note that the form 1120-S MUST be completed and filed before you can file your personal 1040, because the 1120-S will produce a form K-1 which you will include on your personal return.

    FreeTaxUSA only files the form 1040, so you will need to use a different provider to file the business 1120-S tax return.

    If you haven't received a letter from the IRS accepting, then you will have to wait to report the formation expenses on the form 1120-S.

  • Tranfinity
    Tranfinity Member Posts: 2 Newcomer
    edited March 9
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    Yes you are correct, i have filed the form 2553. ( and also registered with state of Florida) and received an acceptance letter for the IRS.

    Also the income shown on the W2 is my only source of income which is not from my S-Corp. I have been employed full time for years now else where.

    As mentioned there is 0 income on my S-Corp.

    Ouch, Now that I have already filed by personal taxes with 1040 Schedule c included, what would you recommend be my next course of action? File taxes for the S-Corp 1120-S, use the generated K-1 form and then file for amendment on my personal?

  • RyanZ
    RyanZ FreeTaxUSA Agent Posts: 70
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    I recommend that you file the 1120-S and amend your 1040 to account for the K-1. This will be especially useful because the wages (and associated employer payroll taxes) are a deductible expense, which will generate a negative income (loss), which will offset the wages on the W-2 from your S-Corp.