Im doing my 1st s corp return, and a personal return for same client. My question is do i include the 1099's from the busines on the personal return and vice versa?
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Wow... S Corp return generates a K-1 form. That K-1 then gets inputted into the 1040. Sounds like you may be in over your head or you are a DIY. Good luck!This post is for discussion purposes only and should be verified with other sources before actual use.
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OK you updated you post to make more sense. On the 1099 issue, Who was the 1099 issued to? If client name, reported it on schedule C and make a deducting entry showing the Fed ID will report the income.Last edited by BOB W; 04-13-2021, 01:53 PM.This post is for discussion purposes only and should be verified with other sources before actual use.
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Thank you bob, refering client to more experienced person with s corp. But client still wants me to prepare personal return, your thoughts?Comment
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1099 were issues in clients business nameComment
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Welcome to the forum, and don't be shy about asking questions on your first time doing an S-corp (assuming you have had at least some training on the topic). One suggestion is to always be clear when you say "1099" since there are dozens of types of 1099, even if you think everyone knows you mean 1099-NEC. The 1099-NEC is normally not supposed to be issued to a corporation anyway, the owner should be very proactive about providing Form W-9 to clients.
Separately, although you didn't ask, I would also advise to always prepare the Schedule L book balance sheet when preparing the 1120S form, even if not required, you will be glad you did in future years, especially since the IRS now requires shareholder basis calculations."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe HowardComment
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When you say business name, does it include the business's corporate name and Fed ID?Originally posted by cynthiah View Post
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When you receive all of your client's personal (in his SSN, and not in the S-corp's EIN) tax documents -- including Form K-1 from the S-corporation -- you enter in your software in the usual way. If you've never entered a K-1 in your software, look around for a K-1 S-corp data entry screen. Or, try F1 or Help, contact your software's tech support, or post here what software you're using. The K-1 will come with a page of codes or you can search for instructions online; those will help you understand the flow from the K-1 to various forms and schedules on the 1040. Also, if an item doesn't flow automatically, the codes/instructions will direct you in case you do have to make a separate manual entry other than the dedicated K-1 screen.
See if the S-corp preparer would be willing to go over the biz return in detail after tax season, maybe mentor you in preparing it next season after you take a class or two. Look for classes in your off-season. CCH's CPELink has a lot of choices. Do you have TTB Deluxe Edition? Read Tab 19 and any suggested IRS Pubs, etc. As well as S-corporation classes, look for a class in K-1s, the K-1 in the S-corp return, then the S-corp K-1 as it flows to the 1040.
By the way, when you are comfortable preparing both the 1120-S and 1040 for that client, you'll probably find your software will export the K-1 from the 1120-S into the 1040. A huge time-saver.
S-corporations and Partnerships were due 15 March. If under extension, due 15 September.Comment
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Thank you, Robert. I was a bit nervous, and thanks for the advice about the 1099's client was given 1 1099 NEC and 1 1099M in the business name., I have decided to recommend this client seek out a more experienced preparer in the business area for now. I will be educating myself more on this business topic for next year thou.. thank youComment
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Thank you Lion... for infoComment
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I'm assuming you filed for an extension on 03/15/21. You have until 09/15/21 to work on this new type of return. If you have some accounting background you may get through it. If the business is small enough you can bypass the balance sheet entries, but not in favor of doing that.Originally posted by cynthiah View Post
Last question: Is this the first year(2020) the S Corp started?This post is for discussion purposes only and should be verified with other sources before actual use.
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If client still wants to prepare his individual return, why not refer him to someone who can do the corp? I know plenty of clients who do this. You still keep the business but then don't have to deal with something you are comfortable with. You don't want to get in over your head and Corps are a different ball game when you only really know the personal side of taxation. I don't know what kind of designation you have but remember they can come after who ever signs that return. You don't want to be in court for something that could have easily been avoided.... Just trying to help. good luckComment
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