cientax

Thanks for your help and can you tell me why I didn't see this yesterday when I had "Elections" open?

Where in ATX for Form 1040 2013 can I find the carry forward election statement and have it included in the return for efile? Thanks.

Do I have to file a new application and go through all the motions of background check, fingerprinting, etc...? Going back to my original question above, since neither me nor my wife have a professional license and all of what "I" do is mostly income tax preparation. My wife only does secretarial work and we have enough clients to stay open year round. We don't even have notary services. How would this affect my election for S-corp status with both of us as shareholders (50% each)? Thank for all your comments.

So Mr. Barosser, can you give more details please. Thank you

Do I have to file a new application and go through all the motions of background check, fingerprinting, etc...?

Wanting to change from sole prop to S-Corp, what is the process that has to be done with e-file center? I already have EIN for S-corp. I am ERO and have been for eleven years, if that makes any difference. I called the help desk and talked to a lady, but she confused me more than she helped me. Thanks.

I didn't ask for any one to calculate the penalty, I only asked if the penalty will be based on gross income, taxable income or net income for a self employed person. I have heard and read different from various sources where some say gross income, some say taxable income, and some say household income. If this is going to cause such an uproar, especially with Mr. Pencil who is a liberal, then forget that I ever asked the question. I'm outta here.

In determining the penalty for not signing up, the minimum is $95 or 1% of income. Which part of the income is the penalty figured on for a self employed person? Is it Gross income before expenses, or is it net income after expenses, or is it TAXABLE INCOME after standard deduction and personal exemptions? Can anyone please provide the correct information. This is a question by one of my clients. I have not read the act as of yet and don't know the answer. Thanks.

I am not the preparer of the partnership return. The SMLLC client is the one I preparer returns for and thanks for your information.

Have a client Real Estate Builder/Developer, owns property in subdivision getting it ready for development and has water lines/pipes running on the property. A contractor working for one of his partners on connecting property that the partner owns damaged the water lines/pipes on both properties. They did not file law suit but the contractor that did the damage paid the partner compensation for damages to both properties, then the partner paid my client for damages done on his property. My client settled for about $100K and wants to know if this will be taxable to him. He is not incorporated, but is SMLLC if this makes any difference. He will be getting K-1 from the partnership. Thanks.

Thanks for all the input and I will take the advice given and run for the hills, which aren't too far away.

I have seen the P & L but no balance sheet. They did not provide the balance sheet and I don't know if they have one. One of the shareholders wife is keeping the books for the company I believe. They are in the roofing business and P & L shows a small profit of about 20K but they just don't want to pay tax on any profits. I'm really not understanding what their motive is completely since they plan to desolve at end of year. I actually doubt that they will qualify for the S-Corp status under reasonablve cause and will eventually have to file the 1120 and pay the tax there. They did not pay wages. I tried to talk them into making the S-Corp election for this year instead of filing for a late election under reasonable cause but they refused and wanted to defer the income then desolve. Any ideas? Thanks

Now that I recall, they did mention to me that it is a C-Corp but that they never operated until mid year 2012 and never filed 1120's for the corp. I'm really not sure what their motive is at this time other than they just don't want to be taxed on the profits of the S-Corp. I haven't talked to either of them since April. I just checked the sos web sit and it shows they are active and incorporated in Oct 2009.

I believe they ARE C-Corp (not sure at this time they didn't say and I didn't think of asking since one of them is a regular client, the other is new) and want to elect S-Corp status then they say they will desolve at year end. The election is late but extension has been filed. They feel they have reasonable cause for the late election.

Have a client that was told by a friend that if they elect S-Corp status, that the profits can be kept in the corporation and not pay tax on the profits until they are used in future years. Can anyone explain to me how this is done when the K-1 shows the profits as ordinary income to each shareholder? Thay insist that they don't have to show it as income as pass thru to personal return because they didn't distribute the profits and kept in the corps account. I did explain to the about the retained earnings, but they still don;'t understand and don't want to pay tax on the profits. What to do? Thanx.