Man I don't know where to start with this mess. The client has been filing their 1120S forms filled out by hand with no k-1's. Except for a few years at the beginning they didn't pay themselves though payroll, and instead just took profit checks. They then filed all the same business information again on a schedule C on their 1040, paying self employment tax there. This has been going on for more than five years.
What is the best way to fix this mess? I'm contemplating amending the 1120S forms to show no activity, then keeping the 1040's as is would be the easiest way to do it; if 1099's were in the corp's tax ID number, nominee them over to the personal with a 1099. I am afraid that instead we will have to go back and file all the missing K-1's, do the old payroll, and amend every single return to show no schedule C, put on the w-2, and make the 1120 S show wages paid. I'd love to know what you guys think is the best course of action.
What is the best way to fix this mess? I'm contemplating amending the 1120S forms to show no activity, then keeping the 1040's as is would be the easiest way to do it; if 1099's were in the corp's tax ID number, nominee them over to the personal with a 1099. I am afraid that instead we will have to go back and file all the missing K-1's, do the old payroll, and amend every single return to show no schedule C, put on the w-2, and make the 1120 S show wages paid. I'd love to know what you guys think is the best course of action.
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