LLC as S.Corp filer

[9542103959]

Which form do I need to file with my tax for my LLC which is S.Corp. Please note that I have 0 income from the business. I had some expenses to keep the business open but no income in the past two years. So far there is only me managing the business.  thank you for your time. 

[KanchanM]

For LLC which is an S Corp, you need to file Form 1120S, even if you had 0 income and some expenses. When you file that form, it will also generate Schedule K1 for all the shareholder/s of the S Corp (if you are the only shareholder managing the business, you will get one schedule K1). When you file your personal tax return, you need to also enter schedule K1 from the S Corp in your personal return. 

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[ChelseaC1]

You will need to file an 1120-S  for your business. When you make the election for your LLC to be treated as an S Corporation then you are required to file a S corporation tax return.

You can get assistance with your business tax return or even have one of our experts file it for you here .

Thank you for your question and congratulations on your new business!

[9542103959]

Since I am late filing passed the 9/15/24 deadline, do I have to pay penalties and interest over the penalties? or do I still have until Oct.15, 2024?

I believe someone answered me before saying would include a link regarding this matter but I do not see the link. Would you please send it again? 

[ChelseaC1]

You can request a first time penalty abatement  for late filing on your S Corporation return after the penalty is assessed. The interest will only accrue on the balance due, so if you did not have any income you may not have to pay any interest on the business return. It is important you get the business return filed in enough time to add the K-1 to your personal return and avoid late filing for Individual Income Taxes which are due on October 15th. 

[KanchanM]

Yes, late filing penalties will apply. If you filed for extension before 03/15/2024, your late filing penalties will apply from 09/15/2024. If you did not file for extension, late filing penalties will apply from 03/15/2024. In any case, try to file your return as soon as possible to avoid further penalties. 

IRS charges a penalty if an S corporation or partnership tax return is filed after the deadline. The penalty is $235 for each person who was a shareholder or partner at any time during the tax year, for each month or part of a month that the return was filed late, for up to 12 months.

Look at page number 7 of this pdf link for penalties: https://www.irs.gov/pub/irs-pdf/i1065.pdf 

[KanchanM]

You can request penalty abatement, following link has more information: https://www.irs.gov/payments/penalty-relief-due-to-first-time-abate-or-other-administrative-waiver#r... 

[atxdesigns]

Yes...I know all of this. However, an investment inside the LLC has closed and the result

is some gains in box 8c and 9 of the K1. Turbotax does not release the carryover passive income

losses because the LLC is still operationing (not checking the final K1 box). How do I update the

return to use the passive income losses from previous years to offset the gains?

[KanchanM]

Is the carryover passive loss in personal return?

[atxdesigns]

Yes

[icalvo]

You can only offset the passive loses to passive income.  You cannot use the passive losses to offset ordinary income like wages, capital gains, retirement income and investment income.

[Mike9241]

as i see it, the passive losses are at the individual level and shown as carryovers on the Turbotax S-corp k-1 form.  Until you terminate that S-corp/LLC those passive losses will remain suspended.  you would probably need to file papers dissolving the LLC - check with your state and file that final S-Corp return. 

another potential issue is reporting losses year after year. that could raise your audit prospects.