Just set up LLC/S-Corp, how do I file for LAST year?

[randomuserid2]

Hello All- thanks in advance for any thoughts you can share.

I've been ramping up my business for a couple of years, and I just set up an LLC and am about to submit the application for S-Corp designation.

As I write this, I'm thinking the answer might be obvious, but I'm hoping for confirmation and maybe some insight: how do I file taxes for _last_ year? I'm guessing it's just as a sole proprietor, but I was kind of hoping that there might be a way to file as and S-Corp _last_ year, even thought it's just now getting set up.

Bonus Points: the primary driver for this is that I want to set up a Solo 401(k), and contribute to it for _last_ year as well, but the forms (Vanguard) seem to indicate that the plan starts the year it was created.

Thanks again for any thoughts- it will be a huge help and relief if I cant get even a bit of direction on this question

[GeorgeM777]

Yes, if last year you were a sole proprietor, then for year 2022 you will complete a Schedule C, Profit or Loss From Business.   Now that your LLC is about to be taxed as an S-Corp., Form 1120-S, U.S. Income Tax Return for an S Corporation, replaces Schedule C as the way your business will report profit or loss to the IRS. Unlike Schedule C, Form 1120-S is not filed with your personal tax return. It is submitted to the IRS as a separate filing and is typically due on March 15th each year.

You are past the deadline for an S-Corp to make a contribution to a Solo 401k for the benefit of the employee.   For tax year 2022, S-Corps have until March 15, 2023, to make such contributions.  The same deadline applies for partnership LLCs as well.  However, the deadline for making a tax year 2022 Solo 401k contribution as a sole proprietor is April 18, 2023.  Thus, as a sole proprietor business owner, you still have time to effect a tax year 2022 contribution to your Solo 401k.

[Mike9241]

I provide this as a matter of completeness but I would conclude your not eligible for a late S-Corp election.  by the way not only do you have to file form 2553 but also form 8832

PER IRS

General Relief Rules for S Corporation Elections

The following requirements must be met to qualify for late S corporation election relief by a corporation or entity classified as a corporation:

• The entity intended to be classified as an S corporation, is an eligible entity, and failed to qualify as an S corporation solely because the election was not timely;
• The entity has reasonable cause for its failure to make the election timely; I would think this is not possible in your circumstances
• The entity and all shareholders reported their income consistent with an S corporation election in effect for the year the election should have been made and all subsequent years; and
• Less than 3 years and 75 days have passed since the effective date of the election (See the Exception to the 3 Years and 75 Day Rule section below).

In addition, if the electing entity is requesting a late corporate classification election to be effective on the same date that the S corporation election was intended to be effective, the requesting entity must also meet the following additional requirements:

• The entity is an eligible entity as defined in Treas. Reg. § 301.7701-3(a);
• The entity failed to qualify as a corporation solely because Form 8832 was not timely filed; and
• The entity timely filed all required federal tax returns consistent with its requested classification as an S corporation.

If the entity qualifies and files timely in accordance with Rev. Proc. 2013-30, the Campus can grant late election relief.  If the entity does not qualify under the provisions of the Revenue Procedure, its only recourse is to request a private letter ruling.er irs

[randomuserid2]

I can't thank you enough for the information- you've provided much needed direction.

[randomuserid2]

Thank you very much for the additional information- it perfectly clarifies the second piece for me.