I am the sole owner of an S Corp. I take Officer Compensation during the year. I went through all the Step by Step for reporting expenses, and found no information or mention of Officer Compensation. I looked at the 1120S in the Forms section and there's a "Shareholder-Employee Compensation Smart Worksheet under deductions. There was a line that said:
- Shareholder compensation not listed on Form 1125-E - SEE TAX HELP
I knew I shouldn't complete a 1125-E unless my revenue was over $500,000, which it isn't. I tried to figure out what SEE TAX HELP meant because it isn't a link. The Turbotax Assistant had never heard of either Officer or Shareholder Compensation. I did searches online and found no information about where to report shareholder compensation if the corp doesn't need to file an 1125-E.
So, I figured I'd see what the printed form looked like with the entry I put in the Smart Worksheet. I saved the Print Preview as a PDF and the return looked correct, everything reported properly. So, I finished the return, did all the checks for accuracy, etc and transmitted it to the IRS.
Then, I started to do my personal taxes and opened the return documents I'd saved after transmitting the return. To my shock and awe, I discovered that the software had eliminated the entry I'd made using the SmartSheet, and the return was inaccurate. I try not to mess with the IRS, but now I'm stuck. I finally updated the return to show the officer compensation as an "Other expense" and the return is now accurate.
I have to wait until the first submission shows processed, which requires me to set up an account with the IRS to view the status. Then I can submit the revised return and wait again for it to be processed. I have to complete the paperwork for an extension on my personal return. I must then submit the personal return after the revised business return is processed so there won't be conflicting information between the business and personal returns.
To figure all this out, I talked to two very helpful Advantage phone agents, but they are trained on personal returns not the Turbotax Business software.
Intuit, if you aren't going to support the Business version of Turbotax, you should stop selling it. Just because we have a corporation, that doesn't mean we're tax experts! That's what we're paying you for.
And, at a minimum, fix the problem I ran into. If the SmartSheet isn't working, get rid of it, and put an example for "Other expenses" to include officer or shareholder compensation, or some other fix that will avoid people running into this in future!
