S Corp Tax Preparation - Form 1120-S
S Corporations are pass-through entities that file Form 1120-S and issue Schedule K-1s to shareholders, who report their share of income, deductions, and credits on their individual tax returns. Unlike partnerships, S Corporation shareholders who actively work in the business are generally required to receive a reasonable salary through payroll. S Corporation tax preparation involves analyzing shareholder basis, distributions, compensation, and overall entity activity to ensure accurate reporting and compliance. Depending on shareholder basis and accumulated equity, certain distributions may be treated as tax-free.
One of our firm’s strengths is helping S Corporation shareholders understand the relationship between their business and individual tax reporting. Because S Corporations are pass-through entities, business activity impacts each owner’s individual tax return. We work closely with shareholders to help coordinate entity-level reporting with personal tax planning to provide a clearer understanding of the overall tax impact.
Many states require S Corporations to file annual reports and pay annual fees to remain in good standing. Massachusetts requires S Corporations to file an annual report and pay an annual fee with the Secretary of the Commonwealth.
Limited Liability Corporations
Limited Liability Companies (LLCs) are business entities formed under state law that provide liability protection for their owners. For federal tax purposes, LLC taxation depends on the number of members and any tax elections made by the entity. Single-member LLCs are generally treated as disregarded entities and reported on the owner’s individual tax return, while multi-member LLCs are typically taxed as partnerships and file Form 1065. LLCs may also elect to be taxed as S Corporations or C Corporations depending on the needs of the business.
In addition to federal filing requirements, many states require LLCs to file annual reports and pay annual fees to remain in good standing. For example, Massachusetts requires LLCs to file an annual report and pay an annual fee with the Secretary of the Commonwealth.
Corporation Tax Preparation - Form 1120
Corporations are separate taxable entities that file Form 1120 and pay taxes at the entity level, rather than passing income and losses through to shareholders. Corporations are also responsible for payroll-related obligations, such as employee payroll taxes and Social Security taxes.
Corporate tax preparation involves analyzing business income, deductions, credits, compensation, and overall entity activity. Corporations may be eligible for a variety of deductions and tax planning opportunities depending on the nature of the business and its operations.
Many states require corporations to file annual reports and pay annual fees to remain in good standing. Massachusetts requires corporations to file a report and pay a fee each year with the Secretary of the Commonwealth.