Question of the Week
Prep Documents Checklist for your 1120S
Happy Friday, all! I hope you had a good week.
Tax season is in full swing, and I’ve spent much of this week preparing 1120S returns for my S-Corp clients. The due date is March 15th, so you still have some time, but not long!
If you’re working directly with me, I likely have all of your info. But if you’re not, or if you’re preparing the return yourself, I thought I would offer a checklist to make it as smooth as possible (I love a good checklist!).
- S-Corp verification: your EIN letter from the IRS and letter from the IRS confirming your S-Corp status.
- Business activity code: This code helps the IRS identify what your business does. You can find a complete list of the codes here.
- Shareholder information: The name, address, SSN, and percentage of ownership of each shareholder.
- Profit and Loss Statement: This report summarizes the income and expenses of the business. Your accounting software, such as QuickBooks or Wave, can create this report. You’ll find it in the Reports section of your software.
- Balance Sheet: This report summarizes the assets, liabilities, and owner’s equity at the end of the tax year. Again, QuickBooks or Wave can create this report.
- Asset Report: If your business has long-term assets or equipment you depreciate, you should have a separate list that keeps track of this. It’s best practice to keep this information in your accounting software. Also, remember you can track assets under $2,500 as an expense under the de minimis safe harbor election rather than track them on an asset list.
- Payroll reports: Print reports that show compensation for each employee. This separation is essential for those of you who are owner-employees, as your compensation appears on a separate line of the return.
- Form 1099-NECs: keep track of any 1099-NECs you sent to your contractors.
Quote of the Week
“I watch a lot of astronaut movies…mostly Star Wars. And even Han and Chewie use a checklist.” – Jon Stewart
Task of the Week
Time is running out. Start gathering your S-Corp documents this weekend!