Last-Minute Review Tips for Monday’s Deadline

Business Planning

Reflection of the week

Last-Minute Review Tips for Monday’s Deadline

Happy Friday, all!

We are just a few days away from the S-Corp filing deadline. So, I imagine a lot of you are getting returns to review and sign

Remember that even if you have a tax preparer and accountant, you are ultimately responsible for a return you sign. So, here are a few more final review tips before you send your signature pages back:

Review Your Contact Information

  • ·It’s easy to skip past the first section of your return, but you want to review your business name, address, EIN, incorporation dates, and business activity codes. This section will be how the IRS identifies and contacts you.

Match the income and deductions section on the front page of your 1120S matches (or is at least close) to your Profit and Loss statement.

  • Your tax return and your books should match. Some expenses like charitable contributions or half off your meals and entertainment won’t appear on your return. But you can reconcile those non-deductible expenses on your Schedule M-1. The amounts may not be exact because of rounding, but they should be close.

Ensure the Schedule L on your return matches your company balance sheet

  • As with your P&L, your balance sheet should match your return. So verify the numbers on that Schedule match what you have on your balance sheets. Additionally, make sure the total assets (line 15) match the total liabilities and equity (line 27).

Review your distributions

  • Distributions are money (or property) you take out of the business during the year. This distribution can be actual cash, personal expenses paid by the business, or estimated tax payments taken out. You must track how much money you’ve taken from the business and not take more than you’ve put in (or you’ll be taxed).
  • You can find your distributions on your Form K-1, section 16. You’re looking for Code D.

Calculate your basis

  • Your basis in the corporation is critical for putting money in and taking money out of the business. So, find your Form 7203 to verify the additions to and subtractions (see distributions above) from the business.

Questions of the week

  • Does your tax return match your Profit and Loss and Balance Sheet
  • Can you verify how much money you’ve taken out of your business?
  • Does your tax return have Form 7203?

Tool of the Week

I hope you found this helpful and made your review process a little easier. We re-released my 1120 solo podcast episode this week if you want a deeper dive. Check it out!

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