I own two businesses in two different states

[ambitionz1993]

Each gas station has its own individual tax ID number and I received a w2 from both of them. Filed an extension for me because I didn't have all the information ready in time. I did my personal taxes with the w2 information I received from the businesses because I needed that for a loan I applied for. Only to find out that they also need the records for the businesses. 

Its been a nightmare and admittedly its my fault. My question is … Will I be ok filing for each business as an s corp even tho there is no shareholders? 

[Critter]

Ok ... you first have to figure out what company entity you signed up to be.  When you got the EINs you had to indicate if the business were going to be corporations ... the IRS would have sent you a letter with the EIN indicating which tax form you need to file.  So was it a 1120 or 1120S ?   Have you filed a company return yet ?   Did you put them on extension ?   If not they are very very late and the penalties are adding up fast.  

And FYI ... if you are an S-corp it does have a shareholder ... YOU.  Not only are you an employee but also an owner. 

[Anonymous_]

....Or did you set up two different LLCs, apply for EINs for each one, and then make elections for the LLCs to be treated as S corporations for federal income tax purposes (i.e., by filing Form 2553)? [I noticed you used both the "LLC" and "S corp" tags]

Regardless, @Critter is correct (if these are to be treated as S corps); you are an employee and also an owner. Moreover, you need professional tax guidance at this point in time.

[ambitionz1993]

the businesses are sole proprietor/llc. I made the error of filing my personal tax returns separately on turbo tax because I was pressed for time, and thankfully I have an extension until October. That is why im electing to file the businesses under s corp. 

Does that make sense or does it make more sense to amend my personal tax returns?

[Anonymous_ · Accepted solution]

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@ ambitionz1993 wrote:

Does that make sense or does it make more sense to amend my personal tax returns?

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You cannot simply elect to file your businesses as an S corporation; there is a formal procedure you need to follow, starting with filing Form 2553 (link below).

If the error you made was not including the income/expenses from your businesses on your personal income tax returns, then all you need to do is amend to include Schedule C (your single-member LLC is disregarded for federal income tax purposes).

https://www.irs.gov/instructions/i2553

[ambitionz1993]

Thanks for the insight!

I take it my best course of action is purchasing the turbotax premier ?

[Anonymous_]

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@ ambitionz1993 wrote:

I take it my best course of action is purchasing the turbotax premier ?

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Not really. I would say purchase TurboTax Self-Employed or, better still, the desktop version which is Home & Business.

[VolvoGirl]

If you file the businesses on schedule C for sole proprietor/self employed/single member LLC you do NOT pay yourself with a W2.   So that was wrong.  You need to go to a professional CPA, etc. to get it all straightened out.  

If you are self employed/sole proprietor etc. you cannot deduct your own salary or any personal withdrawals you make from your business or expense your own time. As a sole proprietor, you are not an employee of the business. The business is a disregarded entity and the Net Profit or Loss is your personal income or expense.

[Anonymous_]

@ ambitionz1993 Do you actually have W-2s and, if so, how did you get them? The posts are contradictory in the sense that you mentioned W-2s in passing, and then mentioned filing as S corps, but then went on to state your businesses are LLCs. 

So, did you (or someone else, like an accountant) make an election for the LLCs to be treated as S corporations and then issue W-2s from the S corporations to you as an employee of the S corps? 

[ambitionz1993]

That wont work because each business has its own unique tax identification number. 

I actually have quickbooks self employed but the intuit rep informed me that application is more for self employed work on the side and not necessarily two companies.

[ambitionz1993]

I guess professional is the takeaway word here. The first accountant was a nightmare, and as a result of her submitting a return three times had the IRS threaten to seize well over 6k from my accounts. 

Thankfully the IRS officer I dealt with was so helpful and figured out why taxes I have already paid are still haunting me. 

As for my current accountant, it appears that he is too busy for walk ins and has a problem keeping appointments. So I am reverting to the wise old saying of you want something done right do it yourself. 

Granted I have a lot to learn but I feel like I have made great progress and I am confident I will only get better. 

[ambitionz1993]

I received the w2s from my accountant. 

What I currently have purchased right now is the intuit business program for 169$. 

I found a link on the 1120S form directing me to the 2533 form you mentioned. I think my best bet is moving forward with the work I have done thus far on the forms because it might be way more work and complications attempting to amend my personal returns with the addition of two separate businesses with two separate EIN. 

I appreciate all feedback and guidance! 

Humor relief, I got oh so beautifully roasted by an intuit product specialist when I asked her why they didn't offer live tax assistance for businesses. "Well, maybe its because intuit presumes people running businesses would have some information about what they are doing "! LOL

[Critter]

Corporate extensions are due 9/15/19 which is why they have no time for you ... if you run into trouble and you did not file a corp extension then seek an appt after that date.  The penalties for the late filing are piling up monthly so professional help may still be better than doing it wrong yourself.  

And the QuickBooks Self Employed version will not work for the corp ... you need to purchase a regular Quickbooks program and I highly suggest the downloaded version over the online one. 

[Anonymous_]

I am thoroughly confused as to which type of entity you actually have at this point @ ambitionz1993. Your accountant issued you W-2s, purportedly, but you are looking at Form 2553. So the issue is whether that form was or was not filed.

If Form 2553 was filed, then an 1120-S can be prepared and a K-1 issued. If Form 2553 has not been filed, it is now too late to make the election for the current tax year (absent relief for a late filed election - see link below). This now begs the question as to whether what you actually have is a C corporation.

https://www.irs.gov/instructions/i2553#idm139773190567344

[ambitionz1993]

Both are limited liability companies. One is in Indiana, the other in Kentucky. Each has its own unique Tax identification number. And yes I probably wouldn't want me as a client either if I was an accountant, and you pointed out that may be the reason they don't have time for me. It is what it is though. I spread myself too thin and wasn't able to be on my A game and unfortunately my professional accountant isn't really offering much support or availability on his part, so I have no choice but to do it to the best of my ability. 

Heres the breakdown: 

2017 accountant filed a 1040 schedule C. At that time, both gas stations were under the same LLC. 

However, at the beginning of 2018 I created a separate llc for the Kentucky station. 

My current situation is I have filed my personal taxes with the w2s I received from the stations, submitted them, and now am working on the LLC's, which Ill be filing a form 2553 and send in at the same time as the 1120s. is there an actual tax advantage from filing each company seperately as an s corp?

Sorry for the confusion, and thanks for the feedback. I appreciate it beyond measure!