dascpa
Level 12

I've had a similar situation for a few years and it's a NIGHTMARE.

The issue is partly ProSeries, but it's mainly the state tax returns. Mine is 40 of the 44 business states.

The real issue is that most states do not accept a K-1 entity input for an 1120S or 1065. They want apportionment based on sales, payroll and property. But that doesn't match what we know the income is on the K-1 received.

Some states allow for direct accounting, but most of those require advance approval to do so by the state tax agency. Not one week before the deadline.

The rest of the states require apportionment.  But we aren't always told what the sales are in that state, just a K-1 profit pass-through.

I told my client a few years ago they need to go to a national firm. They did and next year came right back to me (didn't receive good service).

So what I do - for those (most) state that require apportionment I use the sales only factor and I force numbers to get as close to the known K-1 net profit.

Last item - since my client has no activity in ALL of these states they haven't applied for and received state charter numbers (it would just be 40 state fees).  Therefore we have to paper file many state returns as they're rejected without this number.