Thanks for clarifying. Let me start by pointing out what I'm sure you already know, for the sake of others who may read this thread and find it helpful. So please bear with me on this. 🙂
A business that has a single owner, such as a sole proprietorship or single member LLC is considered a disregarded entity by the IRS. Therefore all business income and expenses for this type of business is reported on SCH C as a part of the business owner's personal tax return.
A S-Corp is considered a physically separate taxable entity all by itself. Therefore an S-Corp reports all of it's business income and expenses on an IRS Form 1120-S Corporate Return. TO do this with TurboTax, you can not use the same program that you use to file your personal 1040 tax return. You must use a completely separate program call TurboTax Business, which is different from Home & Business.
TurboTax Business is not available as an on-line product, or for MAC computers. It's for the Windows platform *only*. TurboTax business can be purchased directly from TurboTax at https://turbotax.intuit.com/small-business-taxes/ though you can probably find it significantly cheaper in a retail store in your local area. If you purchase it from TurboTax on line, you do NOT have to wait for the CD to be delivered. You have the option of downloading the CD installation file to your windows computer immediately after you pay for it. Then you can install the TurboTax Business program right away and start using it immediately.
Okay, basically there are two things you need to do. First, you need to close the sole proprietorship which you have already been reporting on SCH C as a part of your personal tax return. THen you will "open" your S-Corp business using TurboTax business. So here's what you do first, to close your SCH C business and report to the IRS that it is closed. Note that most likely you will not be aware of it, but we "are" accounting for the assets that you will be transferring to the S-Corp *when we get to that point*. Also, do not jump the gun and e-file your tax return either. It's vitally important that you not e-file "any" tax return, until you have completed "all" tax returns (that's federal and state for both your personal return, and the corporate return) and you are satisfied and happy with the results.
You need to report your
business as "sold or otherwise disposed of".
Start working through your
business "as if" you still own it. On the 2nd or 3rd screen in select
the option for "I sold, closed or otherwise disposed of this business in
2016". If prompted for the date, enter the day after you last day of
business in 2017.
If your business had no
income in the tax year, you can not leave the business income section blank.
You 'must' enter a digit, even if that digit is a ZERO.
If you had no business
expenses, then you can leave that blank and don't even have to work that
section through, if you don't want to.
If your business carried an
inventory, the end of year (EOY) inventory must be zero. If it's not, then in
the COGS section indicate that you removed all of the remaining inventory for
personal use. that effectively makes your EOY inventory balance, zero.
If your business had assets,
then you must show the disposition of those assets. In the Business Assets
section work through each individual asset on at a time, and select YES on the
screen, "DId you stop using this asset in 2016?". Then on the next
screen, "Special Handling Required?" if you sold the asset, select no
and you will be prompted for your sales information on that specific asset. If
you did NOT sell the asset, click the YES button. You must do this for each
individual asset listed, even if it's already fully depreciated.
If you claimed any vehicle
expenses in your business at any time from the day you opened your business,
then you must show the disposition of that vehicle. Work through the
Business Vehicle Expenses section and indicate that you stopped using that
asset in the business, when prompted. Then show your disposition of that
vehicle. Most likely, you'll indicate that it was removed for personal use.
Once you have done all the
above, that will make the 2017 tax year the last year you will file a SCH C for
this specific business. For you specifically creexl, once you have completed the SCH C you need to select the FILE tab. Then click the "Print/SAVE For Your Records" tab and click the blue PRINT button on that screen.
Then select "Tax return, key calculation worksheets" and click the blue "print preview" button at the bottom right of that window. This will open the selected pages in a PDF file. Print out a hard copy of that PDF because you're going to need figures from some of those pages, when you start the 1120-S corporate return in TurboTax Business.
Hollar back my way once you've completed all the above. If you've not had any issues, we'll continue. If you do have issues, then we'll deal with them before continuing.
