I opened an S Corp on Mar 30th (CorpA). On Aug 1st, I amended the name & industry of the S Corp (to CorpB). Do I need to file two 1120-S for each of the names?

[lettyfuentes2013]

I think I only need to file one 1120-S since it was an amendment to the company name and industry with the same EIN, but I am not sure.  If I only have to file one 1120-S then it would be for CorpB, right?  All expenses and income since March 30th would go under the 1120-S of CorpB even though they are different industries?

[GeoffreyG · Accepted solution]

Yes.  You seem to understand the correct answers to your questions already, but we will be happy to confirm the details for you.

First, as long as your federal Employer Identification Number (EIN) hasn't changed, then the IRS doesn't really care what name your S-Corporation does business under; to them, it's still the same organizational (tax) flow-through entity.

For example, let's say that Acme Inc., a hypothetical S-Corporation, changes its name to Beta Enterprises, Inc. during the tax year, but keeps the same EIN.  How would we handle this for tax reporting purposes?  Well, we'd just file our one current-year Form 1120S, and use our business name and address as it exists on December 31, 20XX (or whatever is the end of the company's elected tax year).  Our continued use of the same EIN tells the IRS, and our state department of revenue, if applicable, that we're still in business and we're still dutifully filing our tax returns.  Because there really aren't two different S-Corporations, only a name change, we file only one 1120S.

You can apply the same logic to any Schedule K-1s or other state tax forms (e.g., sales tax) that you may additionally need to file.

Second, we can continue to utilize the same reasoning as above, as it applies to different industries.  Simply file a singe Form 1120S, and use the business industry code that is most applicable to your S-Corp as it exists on December 31st.  Businesses change industries all of the time; some also operate in several different industries at the same time.  They invest and they divest.  It is all perfectly normal.

In your particular instance, just be sure to include all applicable tax attributes (revenue, expenses, inventory, etc.) in your S-Corp tax return, if these things were applicable to your discontinued (old) line of business during the tax year.  You can simply combine these items along with your other (new) business activities that were engaged in later in the year.

Hopefully that helps clarify things.

Thank you for asking this important question.

[lettyfuentes2013]

Thank you!

[lettyfuentes2013]

Also, regarding the 1099-MISC given to contractors (on the Payer's Name).  Should those be divided as Sole Proprietor (before March 30th) and as an S-Corp (after March 30th) - meaning I should give them 2 separate 1099-MISC?

[GeoffreyG]

Hi lettyfuentes2013:

If you paid the same independent contractor(s) under two different EINs during the same tax year, then yes, you would issue each of those contractors two separate 1099-MISC forms.  On the other hand, if you paid those independent contractor(s) via an entity using the same EIN throughout the year (which is the situation we discussed above), then you would issue them only a single Form 1099-MISC.  In that case you can use the business entity's name as it exists on the the end of the tax year for the "payers" section.

[lettyfuentes2013]

Thank you.  It will have to be two separate 1099-MISC since when I was a Sole Proprietor, I used my SSN (even though I had an EIN, I never used it), and, when I became an S Corp, I applied for another EIN and started fresh.  One last question, as an S Corp, on the payer's info, can I put my personal name (instead of the S Corp's name) and the S Corp's EIN.  The reason why I ask is because since I changed the company name ( to CorpB), I don't use the contractors anymore, and, for them, all they know is my personal name and possibly the old company name (e.g. CorpA-Trucking Business).  The new name of the company is unrelated to their work (e.g. CorpB-Real Estate) and for them it would be strangle to receive a 1099-MISC with a Real Estate company name.

[GeoffreyG]

Hello again, lettyfuentes2013:

For purposes of sending a physical 1099-MISC to your contractors, if I'm understanding your explanation of the situation correctly, you should be fine using whatever name you wish in the "payer" section of the document.  In other words, at least in this one place, you can choose to call your business activities by whatever name you like.  However, you will want to make sure that the relevant EIN is correct, for that particular payment(s), as the EIN is the "key data field" that is the real cue to the IRS, and your state taxing authority.  What I mean by this is that on whatever tax return you file, if it shows a deduction from income (i.e., expense) for money paid to Contractor A, then you'll need to be sure that the 1099-MISC you give to Contractor A has an EIN that matches the tax return for the entity (sole proprietor on a Schedule C, or a S-Corp on a 1120S, for example) that actually took the tax deduction for the payment.  That is how the IRS, or any auditor for that matter, would "match" a payment made to a tax deduction taken.

Hopefully that logic makes sense.  It should, if you take a few moments to consider a different point of view.  How would an outsider attempt to reconstruct your accounting books, if they didn't have the benefit of your input and first-hand knowledge?  Well, they would begin by matching Entity A, with Payment #1, to Contractor A, and so forth . . . which is why using the correct EIN on the 1099-MISC is so important.

[lettyfuentes2013]

That makes perfect sense.  Thank you very much for all your help.

[lettyfuentes2013]

As I progress through the return, I realize I have more questions.    In the Depreciation of Assets (that I had acquired as a Sole Proprietor), can I deduct those now as an S Corp.  If so, do I separate the depreciation accordingly before and after the S Corp formation and include the depreciation as a Sole Proprietor in Schedule C and the depreciation as an S Corp in the 1120S?  

For Business Expenses, some of the expenses that I made while already an S Corp, I used my Sole Proprietor Bank Account (with my SSN) to pay.  Later, I opened the S Corp Bank Account (with EIN) which I use strictly use now.  Can I deduct all the expenses incurred since becoming a S Corp in the 1120-S even though they came out of my Sole Proprietor Bank Account?

One last question (for now).  I purchased a car under my name (not the S Corp's name) that I use for both personal and business purposes.  Can I deduct car expenses as an S Corp or do those go into my personal income tax return?

I know that is a lot of questions.  Thank you for your help.

[GeoffreyG]

Hello again, lettyfuentes2013:

My supervisor is informing me that I've been spending too much time on this thread, so this is unfortunately the last time I can answer here.  For any additional questions, please open up a new thread on the AnswerXchange, or call us for live agent support at:

help at <a rel="nofollow" target="_blank" href="https://support.turbotax.intuit.com/contact/">https://support.turbotax.intuit.com/contact/</a>.

Quickly, then let's go through your list.  Yes, you can take depreciation expense on the same asset for both your Schedule C and Form 1120S purposes in the same tax year.  Just make sure that you adjust your "basis" in S-Corp assets downward to include or reflect any depreciation previously taken while an asset was "owned" by the sole-proprietorship.

With respect to the paid expenses question, you should (to be proper and correct) consider the S-corp expenses you paid personally as "capital contributions" made to the S-Corp.  That treatment would go toward increasing your basis in S-Corp stock.  If you then consider that you "reimbursed" yourself through the S-corp, this could be thought of as a nontaxable return of capital.  But I would also consider the payments as having been made by the S-corp for expense purposes (i.e., figuring your income taxes, net income and such).

For your last question about car expenses, I would respectfully refer you to a TurboTax webpage we have on this very tax topic.  There's a really good section about halfway through that discusses cars and S-Corps / C-Corps.  One of those circumstances, I think, fits your situation exactly.  Here is the link:

<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tools/tax-tips/Small-Business-Taxes/Business-Use-of-Vehicles/INF1207...>

Thanks again, lettyfuentes2013.  I'm glad that I could help you as much as I could.  Good luck with your continued business.

[lettyfuentes2013]

I understand, thank you for your help.