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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I have 2 clients that own 50% each of an S - Corp. The last

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I have 2 clients that own 50% each of an S - Corp. The last day of operations was 9/12/11. The co owed payroll taxes of $45,000.00 as of that date. They have since made payments of $20,000.00 and still owe $25,000 plus interest as of today.

What amount of payroll tax liability do I report on the 9/15/11 S - Corp return

Lev :

Hi and welcome to Just Answer!
Are you filing a short year tax return for S-corporation for 2011?
Is that a final tax return?

Customer:

yes i am

Lev :

On form 941 - http://www.irs.gov/pub/irs-pdf/f941.pdf
See line 17 - If your business has closed or you stopped paying wages - that box shoudl be checked.
You will report only wages paid during that quater.
Do not report penasltis and interest charges and do not report payments made after the payment period. These items will be reflected on your account - but not on this return.

Lev :

After the Employer’s QUARTERLY Federal Tax Return will be processed - the IRS will send a letter informing about additional charges and balance. You will need to verify if calculations made by the IRS are corrected - and contact the IRS if any correction needed.

Lev :

Line 11 Total deposits for this quarter, including over payment applied from a prior quarter - includes only payments made this quarter (for which the tax return is prepared) and prior quarters - not payments made after this quarter.
Line 14 Balance due reflects the balance as of 9/15/11 - and is not affected by payments made after that date.

Customer:

I am asking about what to report on the balance sheet on the 1120s

Lev :

On the balance sheet - you report the balance of tax liability as of the last day of the tax year.
Thus - if that is a short tax year ended 9/15/11 - the tax liability is determined in effect on that date regardless if the tax return is filed late. Do not include any payments made after 9/15/11.

Customer:

thank you very much

Lev :

You are welcome.

Lev :

When we are filing the tax return - all information on that tax return must be as on the last day of reporting period.
The fact of filing the tax return late generally should not affect any changes made after that period.

Lev and other Tax Specialists are ready to help you