Business & farm

@DoDesign  

Sorry, unless I am tagged as noted above, I am not in the community much post deadlines.

Responses:

• The form 7203 will be included with the efile, but many of the fields will need to be input manually.  As noted previously, this form needs to be included with your personal return, not the business return.
• Yes, box 1 on the K-1 is ordinary income.  This is due to the fact that pass-through entities are not taxed and all income / loss is passed out to the respective shareholder(s).  These amounts are taxed at the individual level AND either increase or decrease your tax basis in the S corporation; this is where you only have one level of tax.  S corporations then make distributions (when there is income) to shareholders in order to cover the tax liability of the shareholder.  These distributions are not taxable to the shareholder as long as there is tax basis.  As a result, maintaining accurate tax basis is critical.
• If you are past the ability to efile the tax return, then if you send in a paper version make sure you send it certified mail return receipt.
• Pass through entity tax gets complicated quickly.  TT does a good job in providing the forms and providing some support / explanation when preparing, but the preparer needs to know how to address the issue when asked questions.  So unless you have a good grasp of S corporation tax and the interplay it has on your personal tax situation, then a tax professional is a good choice.  Keep in mind that these individuals prepare hundreds of returns sometimes, get backed up, and your timing of getting the return completed may not correlate with their timing.