Final return for an LLC setup to do taxes as an S Corp.

[rosy319]

I have two LLCs and I elected to have both treated as S Corps for tax purposes.  The one LLC has been around for awhile and was active for a time and for the last couple of years I have done nothing with it and want to shut it down.  I just started the other LLC at the end of last year and there has been zero activity and I just don't want to deal with business things anymore and want to shut this one down too.  Few things and some questions.

* Neither had activity last year so I will be filing the 1120s for both since I am required to do so even with zero activity. 

* I am the sole member on the one and it has no assets and no money.

* I am 50/50 with my husband on the other and again it has no assets and no money because I let it all go awhile back and just never officially terminated anything.

* Can I mark final return on both (filing for 2022 and it is currently March 2023) and then do the official termination with the state after?

* Do I really need to cancel the business accounts (ein) with the IRS by sending them a letter?

Any help is much appreciated.  I have been searching the internet and all the articles I come across deal with businesses closing that have employees and assets and don't match my situation.

Thank you!

[MinhT1 · Accepted solution]

If your two S-Corps had no activity, income or expenses in 2022 and you wish to close them down, you should file tax returns (form 1120S) for them with 0 income and expense.  Do not mark the returns as final yet.

You can then complete the formalities when the state in 2023. Then the IRS says that you will file a final return in the year the corporation ceases to exist (i.e. for tax year 2023). You will also mark the Schedules K-1 as final.

If you dissolve the corporation or liquidate any of its stock, you must also file form 966 - Corporate Dissolution or Liquidation.

Please read this IRS document for more information.

You can also choose to close your EIN accounts with the IRS by following the instructions in this IRS document.

@rosy319  I have edited my answer.

[Edited 03/08/2023  |  10:22 AM PST]

[rosy319]

Thank you so much! 

I kept thinking I had to wait to file final returns until after I filed the articles of termination with the state (which I am going to do this month) meaning I would have to wait until next year to file final returns because the businesses won't be officially closed with the state until this year.  Technically, the one business has been closed for awhile and the other I never did anything with.  The IRS says to file final returns the year your business closes except they don't specify what officially makes your business closed.  Again, it was last year for both even though I haven't terminated them with the state yet.  I just want to make sure the IRS doesn't slap me with penalties because I missed a year of returns because I filed the final return too soon.

[MinhT1]

Please see my edited answer as above.

[Opus 17]

@Anonymous_  

This is something you often deal with, I think.

[Anonymous_]

I would only add that if the S corporation is dissolved, it is required to file its final return by the 15th day of the 3rd month after the date it is dissolved.