Check received after I dissolved my S-Corp, should I deposit it?

Forum|Forum|3 years ago
August 18, 2022
2 replies
27 views

I dissolved my S-Corp to become a sole prop because I'm retired and it's much simpler. I sent an invoice to an existing client and he sent me a check made out to my S-Corp, not to me personally. I've formally dissolved the corp with the state but still have the checking account open. Should I just deposit the check then transfer the funds to my SP account or should I go through the hassle of asking my client to reissue the check correctly?

TurboTax Business Windows

Best answer by Anonymous_

Did your S corporation send the invoice to your client (which your client paid)?

It most likely will not make much of a difference if you are the sole shareholder, but you could simply include the receipt of this income on the final S corporation return (1120-S).

Anonymous_Answer

Level 15

Did your S corporation send the invoice to your client (which your client paid)?

It most likely will not make much of a difference if you are the sole shareholder, but you could simply include the receipt of this income on the final S corporation return (1120-S).

Mike9241

Level 15

if the invoice was issued before the S-corp was dissolved then I would agree with @Anonymous_. if the S-Corp's final return was filed, then you would probably need to amend it. this would be so you don't pay the self-employment tax on the income. if issued after the dissolution, but the goods or services were delivered before this, I think S-Corp reporting would be proper. if the goods or services were delivered by you after dissolution then Schedule C reporting would be proper because of the self-employment tax liability.

after saying all this, if you're willing to pay the self-employment tax on the income, even though the income could be reported on the S-Corp, the IRS should have no objections.

Mike9241

rvhatcherAuthor

Level 4

The SP issued the invoice, but they paid to the vendor in their system, the S-Corp, rather than read the bold writing on the invoice to pay the SP. I dissolved the S-Corp on June 30 but kept the checking account open just in case something like this happened. I think I am going to deposit to the S-Corp account and pretend it came in before June 30.