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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22833
Experience:  Taxes, Immigration, Labor Relations
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Last year was first year I formed Corp-S. I filed 1120 for

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Last year was first year I formed Corp-S. I filed 1120 for Corp-S, which has a small loss. How do I record that loss as pass-thru to my individual 1040. Do I do it via Schedule C ? My Corp-S is fiscal year July 2012 to July 2013, which filing due Oct15th. I also filed a 1040 federal extension which also due Oct 15th, so do I send both filing together ? Or can I efile them, and how do I do it togehter 1120 and 1040, since I use "pass-thru" ?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Lev :

Hi and welcome to our site!
Appreciate for coming back.
First of all - I assume that you are filing form 1120S fro your S-corporation - not 1120 - correct?

Lev :

Then - if you have S-corporation - you should not use schedule C (unless you have another business activities besides your S-corporation) .

Customer:

I assume my turbo tax will generate 1120s, but I can generate and check

Customer:

So how do I do "pass-thru" ?

Lev :

The business loss you have from your S-corporation is reported to you as a shareholder on schedule K1 - www.irs.gov/pub/irs-pdf/f1120ssk.pdf‎
Use box 1 for Ordinary business income (loss).

Customer:

Long ago one of my HR Block did a "pass-thru" filing of corp-s to my individual, I forgot how she did that, was it via Schedule-C ? It's 1 person consulting corp-s

Customer:

Also how do I send my corp-s 1120s and my 1040 together ? Can I still do efile, so just print and send them togehter ?

Lev :

"pass-through" means - S-corporation files its own tax return on the form 1120S, but do not pay any income taxes - and any taxable income (or loss) is passed to shareholders - and reported on K1 which should be generated together with 1120S.
On your own tax return - you will use amounts from K1 and report on schedule E - not schedule C.

Customer:

"amounts from K1 and report on schedule E" would consider it pass-thru ? I guess ?

Lev :

You should file 1120S and your individual tax return - form 1040 separately - these are separate tax returns and are sent to different addresses as indicated in instructions.

Lev :

If you are using TirboTax (or any tax preparation software) - it will help you to transfer amounts from K1 to schedule E - http://www.irs.gov/pub/irs-pdf/f1040se.pdf
Your business loss from S-corporation will be reported in Part II.

Customer:

I see, the only thing link them together (pass-thru) is K1 to Schedule-E, right ?

Customer:

One last question: my corp-S is July 2012 to July 2013 "Fiscal", I can link that K1 amount loss to my Calendar 2012 1040 Schedule E , it's ok ?

Customer:

Is "Fiscal" Corp-S link to Individual 1040 "Calendar" ok ?

Lev :

That is correct. Whatever income or loss is realized by S-corporation is passed through to you as a shareholder.
In your case - S-corporation reports the loss on schedule K1 - and you include that loss into your personal tax return on schedule E.

Customer:

Ok, that answer my quesiton. THank you.

Lev :

You are welcome.

Customer:

If I have anymore question in near future, I will ping you. I like your knowledgeable answers.

Lev :

I see another question you asked some time ago - http://www.justanswer.com/tax/7kalp-sept-2012-quit-full-time-job-w2-start-software.html
Please take a moment and rate it. So I would be credited for my work. My goal is to provide EXCELLENT service - and I will address all your tax related issues.

Customer:

One quick quesiton: can I use turbo tax efile my corp S, and also efile my individual return, or they must be print and mail in, since I am doing the K1-E link, should still can do efile I guess ?

Lev :

Yes - you may do that - but these are two different types of returns.
You need to complete your 1120S first - it will be sent to the IRS with K1 - and after that - you will prepare your 1040 and will use information from K1 with other reporting forms (W2, etc)
You may efile or mail your tax returns - but these are two separate returns.

Customer:

I just rated you "Excellent" with 20% tip.

Lev :

Appreciate you for taking time to rate my answer and for generous bonus.

Customer:

Should I take my turbo tax business and turbo tax indidual to HR-Block or some tax people for them to look over, or no need to ?

Lev :

I would suggest to have someone to review your preparation because you are doing that first time. It might be easy to miss some errors. You might benefit if someone knowledgeable will review your tax returns and you would timely correct all errors.

Customer:

How I best find someone who can do that, especially someone who know about business pass-thru. HR Block ? Would they charge less than if they do it all, since turbo tax is doing all the work already. Or do you provide such service, since I can email you the return.

Lev :

As I know many tax preparation services including HRB offer so-called "second look review" - so when you contact - you may ask for review - and it might be not cost too much.
Otherwise - if you prepared your tax return on your own and just asking to review it - not to file - you might be charged her their time. But you may ask about that before ordering the service.
Any tax preparation service may be used.
Unfortunately we do not offer such service. I may take a look at your tax returns if you post it online - but be sure to remove all personal information because all posts are available for general public.
However most likely - you need all your deductions and calculations to be reviewed not just the tax return.

Customer:

Much thanks for answer. I will ask you again in future if I have more quesiton. Thank you. Bye.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22833
Experience: Taxes, Immigration, Labor Relations
Lev and other Tax Specialists are ready to help you
Expert:  Lev replied 1 year ago.
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