according to the IRS you have to file an 1120 for 2021
from 2020 form 1120 instructions
Who Must File
Unless exempt under section 501 (it isn't), all domestic corporations (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. so you must file a 2020 1120.
note, if the corp began business in 2020 then the expenses must be taken on the 2020 return. since you converted to S-Corp there would be no tax benefit.
start-up expenses are taken in the year the corp began business as follows
$5,000, reduced (but not below zero) by the amount by which such start-up expenditures exceed $50,000, and the remainder of such start-up expenditures shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the active trade or business begins.
while not taking an annual salary might cause tax issues for the shareholders and S-Corp the timing of taking the salary is not specified in the code or regulations. what not to do. some S-Corp shareholders take distributions during the year and then at year-end reclassify and report some or all as salaries. if caught by the IRS it would result in severe penalties.
however, if you don't take distributions (including paying personal expenses) repay shareholder loans, or take salary advances not reported as such then you could wait until December to take it.
read this thread about a court case involving no salary but shareholder/officer took distributions
on appeal, the Tax Cort sustained the IRS. T.C. Memo 2013-180
the thing with low income on an S-Corp is that the IRS tends to concentrate audits on taxpayers with a lot of income because that's where an audit is likely to bring in the most dollars. other audits arise because something on the return seems out of whack with the expected range.
have I come across S-Corps where no salaries were taken because of low income or losses the first couple of years with no IRS audit? yes. they were rolling the dice and won. put another way. an S-Corp with $800,000 in gross revenue and no officer's salary is more likely to be audited than a similar case where revenue is only $5,000
no officer's salary stands out because that's on line 7 of page 1 of the return.
