I recently finished and submitted my MD state income tax return within TurboTax Business for my S Corp. The electronic form is 510. At the end of it, it is asking for me to pay income taxes to MD state. Last year, when I got my taxes done by H&R Block, the tax preparer told me that since that S Corp income shows on my personal taxes, I am paying that tax there (on my personal tax return), and there is no need to send my taxes on my S Corp return to MD state. Why is TurboTax asking me to print a voucher and asking me to send my S Corp taxes to MD state if I am going to record that business income on my personal MD state return? I am using TurboTax Premier for my personal (individual) return as well.
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The short story is that you’re paying the taxes once (with the MD 510) and you get credit for it on your personal return, MD-505.
The longer story:
The tax that MD wants your S-Corp to pay is on behalf of the nonresident shareholders (you). Apparently MD feels more secure getting the payment from the S-Corp than trying to collect it from a nonresident shareholder several states away.
The estimated tax payments the
S-Corp has made to MD (on your behalf) should be reflected on the 1120S and they
will then flow to the MD-510 return.
If
you haven’t already, the tax payments should be entered on the 1120S, page 3,
in the Deductions section, line 12, on the yellow lines below line F. [See Screenshot #1, below.]
From here, the figures just flow: (like the song, the “knee bone is connected to the leg bone…ankle bone…, etc..)
The short story is that you’re paying the taxes once (with the MD 510) and you get credit for it on your personal return, MD-505.
The longer story:
The tax that MD wants your S-Corp to pay is on behalf of the nonresident shareholders (you). Apparently MD feels more secure getting the payment from the S-Corp than trying to collect it from a nonresident shareholder several states away.
The estimated tax payments the
S-Corp has made to MD (on your behalf) should be reflected on the 1120S and they
will then flow to the MD-510 return.
If
you haven’t already, the tax payments should be entered on the 1120S, page 3,
in the Deductions section, line 12, on the yellow lines below line F. [See Screenshot #1, below.]
From here, the figures just flow: (like the song, the “knee bone is connected to the leg bone…ankle bone…, etc..)
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