S Corp and 2553 election

[Magnoliatrucks]

I own a small real estate business which is an LLC. Last year I chose to use form 2553 to file as an S-Corp. I am completing my 1120s and want to make sure I am not missing something. I am 100% owner, but the company  has a payroll service that pays my wife and I as Real estate agents a salary ($100kyr). Currently I have the $100k on the 1125e shareholder compensation as 100% shareholder. Does the $100k go there or below that in Section A Salaries & Wages?

Lastly I have all my deductions on line #20 complete as well as my ordinary business income on line #21 complete. I do not have anything input after line 21 though. Is this correct?

If line #21 is $250k for example that is what should carry over to my K1 on line #1 correct?

Thanks in advance for the clarifications

[MinhT1 · Accepted solution]

Your $100k salary is reported on line 7 - Compensation of officers.

Your wife's salary is reported on line 8 - Salaries and wages.

The S-Corp's ordinary business income is on line 21. In general, lines 22 to 27 are empty.

If you are the only shareholder, line 21 should carry to line 1 of your Schedule K-1.

[Mike9241]

the sole question is - is your wife an officer?  she doesn't have to own any stock. if so her comp goes on the same line as yours - line 7 otherwise line 8

your expenses are supposed to be reported on the applicable lines on the 1120s page 1. it's highly doubtful that all expenses go on line 20. your gross income goes on line 1.  so line 21 should be line 6 less line 20 

you do not understand 1120s preparation. seek a professional for the first year so you know how to prepare the return correctly.  you are preparing so badly that IRS could decide to audit the return.  worse you could be misreporting the income that needs to be reported on your 1040 based on the k-1's.

by the way, unless you extended the return it's late. it was due 3/15/2022. the penalty is about $200 for each month late but can be waived 

[Magnoliatrucks]

OK great I made that change to add her income on line #8 because she is not an officer. Another question... I made an estimated tax payment for 2021 through the EFTPs website. I also made two additional estimated tax payments, but through the IRS's website. Do any or all of those go on the 1120s? If so they should be offset by taxes owed, but like I said section #23-27 is blank.

If nothing goes on my 1120s then I assume those three estimated tax payments will go on my personal return to pay for the taxes due from the K1 that carried over to my personal return?

Sorry for my ignorance, but this is my first time going through this.

[MinhT1 · Accepted solution]

Income from your S-Corp flows through to you with the Schedule K-1 which you enter on your personal tax return (form 1040).

Your estimated tax payments are entered on your personal tax return.

You can enter estimated taxes you paid by following these steps:

1. In TurboTax, open your tax return
2. Click on Federal in the left-hand column, then Deductions & Credits on top of the screen
3. Scroll down to locate the section named Estimates and Other Taxes Paid and click Show more
4. Click on Start next to Estimated Tax Payments
5. On the next page, click Start next to Federal estimated taxes for 2021 (form 1040ES)

[Magnoliatrucks]

Perfect! Thanks for being so helpful. That's exactly what I was hoping for. Last and final question (I hope). We purchased a new electric vehicle in 2021. Does it matter if the $7,500 credit goes on the 1120s or the personal tax return?

Since this will be my first year filling my personal return as an "employee", but with a K1 do I just file a standard return or do I still need to use a more complex return like in years past?

[JulieS]

You should report the new EV on your personal return if it is titled to you personally, or on the 1120-S if it legally belongs to your company. 

You will need to use Premier or Self-Employed to report your Schedule K-1.