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I need help filing an LLC which elected S-Corp in 2020. I…

I need help filing...

I need help filing an LLC which elected S-Corp in 2020. I have questions about Wisconsin Apportionment Taxes. All income is in Wisconsin. Not much profit. Turbotax is telling me I have a problem on Form 5S and it says I cannot say 100% apportionment.

Accountant's Assistant: What is the error code displayed?

Form 5S, pg 1: Line 2, Apportionment % If you are using one of the Apportionment Schedules, your apportionment percentage cannot = 100%.

Accountant's Assistant: What happened before this error appeared?

I got to the "ready to e-file" step.

Accountant's Assistant: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.

I put the income for the year in. Not sure what the Apportionment issue is.

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Answered in 1 minute by:

2/27/2023

Tax Professional: VictorDro-ijezvcuwg3,

replied 3 months ago

VictorDro-ijezvcuwg3

Category: Tax

Satisfied Customers: 2,203

Experience: Expert

Verified

Welcome to JustAnswer. Thank you for contacting us for assistance with your concern. I'm Victor, and I will be happy to assist you with your question.

Customer reply replied 3 months ago

Thank you

Tax Professional: VictorDro-ijezvcuwg3,

replied 3 months ago

In Wisconsin, businesses that have income both inside and outside the state need to apportion their income for tax purposes. Apportionment is the process of dividing your total income into the income that is earned in Wisconsin and income earned outside of Wisconsin. Wisconsin uses a single sales factor apportionment formula, which means that your apportionment percentage is based on the percentage of your total sales that are made in Wisconsin.

If all of your income is earned in Wisconsin, you may be tempted to report a 100% apportionment percentage. However, as the error message in Turbotax is indicating, this is not allowed if you are using one of the apportionment schedules. You will need to review your sales data to determine the percentage of your total sales that were made in Wisconsin, and then report that percentage on your tax return.

Customer reply replied 3 months ago

I don't have any sales outside the state. We do construction and cleaning, all in Wisconsin. We do not sell anything but services.Do I need to change something so it does not do the apportionment?

Tax Professional: VictorDro-ijezvcuwg3,

replied 3 months ago

If all of your business income is earned in Wisconsin, you may not need to apportion your income for tax purposes. You should review the specific instructions for the tax form you are filing, as well as any guidelines from the Wisconsin Department of Revenue, to confirm whether you need to report an apportionment percentage.

Customer reply replied 3 months ago

That helps a lot. Where would I make a change to the way I am filling this out in Turbotax? Using TurboTax Business 2022DesktopDo I need to do anything with the question about paying tax at the entity level? I am not sure what that means.On the federal return I have to tax to pay. There is little income.No tax to pay

Tax Professional: VictorDro-ijezvcuwg3,

replied 3 months ago

In TurboTax, you will need to go back to the page where you entered your business income and expenses for the year. Review the information you entered to confirm that all of your income and expenses are correctly reported, and make any necessary adjustments.

If you do not have any sales outside of Wisconsin, you should look for an option in TurboTax to indicate that your business income is entirely earned in Wisconsin, and that you do not need to apportion your income. The specific location of this option may depend on the version of TurboTax you are using and the specific tax form you are filing, but it should be clearly labeled.

If you are still having trouble locating the correct option or making the necessary changes, TurboTax customer support may be able to assist you further.

Customer reply replied 3 months ago

I do not use a separate accounting method to determine Wisconsin income.Thank you

Tax Professional: VictorDro-ijezvcuwg3,

replied 3 months ago

You're welcome! Thank you for the opportunity to answer your question! If you would ever like to ask me another question, you can add me as a favorite on your "My Questions" page or by clicking here: my_profile.

And thank you for trusting JustAnswer with your question. Please don't hesitate to reach out if you have any additional questions. Have a great rest of your day.

VictorDro-ijezvcuwg3

Category: Tax

Satisfied Customers: 2,203

Experience: Expert

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