Q:

Subject: can we change to a c corp now

We are an s corp and made money this year but took a very small salary.

We are using the Intuit tax preparation program. It asks if we are an s corp or c corp. Can we decide not to be an s corp and just prepare our taxes with the c corp forms?

The 1120S forms that are due by June 30 of this year: Are they establishing that we are an s corp for the last tax year (2004) or this tax year (2005)?  thanks for any input you have.

A:

If you have a corporation, you really should be working with a tax pro to handle easy issues such as this.  In fact, you should have been working with one before you chose to become an S corp.

If IRS has accepted your election to be an S corp, you need to file S corp returns (1120S) for every year until you formally revoke the S election.  You can't just arbitrarily change the status from S to C year by year.  When you filed the S election form, you obligated yourselves to reporting all corp income on your 1040.

The 1120S for 2004 is due 3/15/05.  You can get an automatic six month extension (to 9/15/05) by filing Form 7004 by that date.  I have no idea where you are getting a June 30 due date.  All tax return due dates are on the 15th of the month.

Good luck.

Kerry Kerstetter

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 3/02/2005 01:52:00 PM Send this post: