Previously a sole propriretor. Did my taxes with Turbotax, personal and business together. Last year I became an S-Corp. I've filed my corporate taxes and now have my K-1. How do I file my personal? More specifically do i write off anything? Do I include my W-2 from my S-corp? do I write off my car or car maintenance? The tax software sees my prior years, so How do I start over on turbo tax? Oddly, how do i do my personal taxes?
To start over in the Desktop program you just start another new return. Go up to File-New. You enter both the W2 and K-1 into your personal return.
To enter a K-1 go to
Federal Taxes Tab or Personal (Home & Business version)
Wages and Income
Scroll down to S-corps, Partnerships, and Trusts or to Business items
Schedules K-1, Q - Click the Start or Update button
Be sure to pick the right kind of K-1. There are 3 kinds, 1041, 1065 & 1120S
Thank you.
Also, I filed extension and paid anticipated taxes. If I start new will this be included?
No. You have to enter everything again. You are starting over because you don't want to transfer from 2021, right? You will have to enter all your personal info and income etc.
To enter the amount you paid with an extension (including state extension) go to
Federal Taxes (or Personal for desktop H&B version)
Deductions and Credits
Then scroll way down to Estimates and Other Taxes Paid
Other Income Taxes - Click the Start or Update button
Next page second section Payments with Extension
Either Visit All or Click Start or Update by the extension you paid
Rather than starting your entire tax return as blank, you may just want to delete the Schedule C business from it.
Then just enter your W-2 and the K-1. The corporate tax return should have already included all valid business deductions (so the K-1 already has all of that factored in). That means in most cases you don't enter any additional expenses on your personal tax return.
One additional question on deductions, Now that it's an S-corp would you no longer write off home office or your vehicle expenses? Thanks,
@TexasAubs wrote:
One additional question on deductions, Now that it's an S-corp would you no longer write off home office or your vehicle expenses? Thanks,
Correct. You should have paid yourself a fair market wage (considering the amount of work you did for the corporation) that was subject to employment taxes and withholding, and reported on a W-2. Any additional profit can only pass through to you after you have paid yourself a fair market wage. Then, as a W-2 employee, you can't deduct home office expenses or vehicle expenses on your personal tax return.
However, the S-corp can reimburse you (or any other employee) tax-free for legitimate business expenses, including use of a personal vehicle for business, if the business follows an accountable plan. The business can then deduct the expenses. For more information, see IRS publications 463 and 535.
https://www.irs.gov/forms-pubs/about-publication-535
https://www.irs.gov/forms-pubs/about-publication-463
It will be tough to prove home office expenses under an accountable plan, but vehicle expenses should be pretty easy to prove, provided you kept adequate records of vehicle use.