Do I have to take the loss from my S Corp on my 1040?

[LolaMerle]

Our S-Corp had a loss in 2022. I need to spend more time doing the 1120S for the S-Corp and have gotten an extension.  However, I want to get my 1040 filed as soon as possible.  Since I'm not sure the amount is correct on the K-1's, can I leave that information out on my 1040 and file without taking the loss or reporting the K-1 at this point? It doesn't make a difference in how much tax we owe. 

[MinhT1 · Accepted solution]

You may file your tax return without the K-1, but it is advisable to amend your return once the K-1 becomes available. 

Leaving out out a loss could make you take larger tax credits (such as the earned Income credit) in certain cases and the IRS may require that you amend your return.

[Rick19744]

A taxpayer does not get to pick and choose which tax year they want to take losses.

Losses need to be taken, assuming allowable, in the applicable year.

While we don't have any facts, it is most likely you are able to utilize the S corporation losses on your personal tax return.

As such, I would recommend you prepare your 1040 without any S corporation losses, file an extension, pay any applicable taxes, finalize your S corporation return, add your K-1 details to your 1040, file your 1040.

[Mike9241]

"It doesn't make a difference in how much tax we owe." if that's the case why are you in a rush to e-file your 1040. the return and taxes aren't due until 4/18/2023. while the taxes are due 4/18/2023 you can extend the 1040 until 10/15/2023. this avoids the need to amend.

[LolaMerle]

Thanks for your reply.  We are applying for a refinance and need to get it in right away since we want them to use 2022 tax info.

[LolaMerle]

Thanks, good advice.  Yes, I will file an amended return when I finish the K-1's, whether it affects the tax we owe or not.