New LLC

[miketang2]

My wife filed her LLC (S-Corp) paperwork in December 2019, but didn't have any income or expenses under the entity in 2019.  She was a sole proprietor.  Are there any additional forms that need to be filed for the 2019 tax year?  If so, do they need to be filed by March 16th?  Or can they be filed along with our individual taxes in April?

Thanks!

[Anonymous_ · Accepted solution]

A Form 1120-S is required to be filed if she made an election for her LLC to be taxed as an S corporation and that form needs to be filed by March 16th, regardless of whether the company had any income or expenses.

See https://www.irs.gov/instructions/i1120s#idm139641043822480

[ColeenD3]

Yes, she must file by March 16, 2020.

• A domestic corporation (including a Subchapter S corporation) must file an income tax return whether it has taxable income or not, unless it's exempt from filing under section 501.
•  
• A foreign corporation generally must file an income tax return if it:
  • Engages in a trade or business in the United States, even if it has no income effectively connected with the conduct of a trade or business in the United States during the taxable year,
  • Has income, gains or losses treated as if effectively connected with the conduct of a U.S. trade or business and subject to taxation under subtitle A of the Internal Revenue Code (relating to income taxes), or
  • Doesn't engage in a trade or business in the United States at any time during the taxable year but has U.S. source income, and the withholding at source under Chapter 3 of the Internal Revenue Code didn't fully satisfy its taxation.

  • Was, or had a branch that was, a QDD (Qualified Derivatives Dealer).

[miketang2]

Thanks.  So just checking, it is correct to record all income and expenses prior to the filing of the LLC as a sole proprietorship (as we have done in prior years), and then filing 1120-S with no income and expenses for the 1 week it was active in 2019.  Is that correct?

Thanks again!

[ColeenD3]

Yes. You're welcome.

[miketang2]

Thanks.  I guess I should say one more thing.  We filed the articles of incorporation with the state (Illinois) in December 2019, however did not get any of the federal filings done (Fed Tax ID, S-Corp filing etc) until Jan 2020.  Still the same answer that a form 1120-S should be filed?

Thanks!

[RobertG]

If you are filing State 1120-S forms, you need to also file the Federal forms, or you will get correspondence from the IRS as to why you did not file.

[Rick19744]

A couple of items have not been discussed yet and are very important:

• In order to elect to be taxed as an S corp, you need to request permission from the IRS.  On the form you would have indicated when you wanted the election to be effective.  What was the date you indicated on the form?
• When making the S election, the IRS will respond with a letter to the taxpayer.  Have you received confirmation that the IRS accepts your election?