Will I be taxed as an S-Corp for all of 2018 if I incorporated on 10/22/18 and was a sole proprietor before that?

[Beth_8274]

My brother has been helping me become an S-Corp because he successfully did the same thing, but now it seems he may have given me wrong advice, I had my business (freelance photographer) for a couple years but acted as a sole proprietor until I incorporated in my state on 10/22/18, I mailed IRS form 2553 on 10/24/18 (yet to hear back), he told me that once form 2553 was approved I would be taxed as an S-Corp for the entire year, but now a friend told me that can only happen if I was already incorporated in my state for the whole year and since I was a sole proprietor for 10 months and only a corporation for 2 months I will have to wait til 2019 to be taxed as an S-Corp, can anyone clear this up for me?

[George4Tacks · Accepted solution]

What has your paid tax professional told you?

[Beth_8274]

Once I have enough money I will get paid tax help.

[itonewbie]

@Beth_8274 We are sorry to hear about your mother's cancer and we wish her and your family all the best.  However, George's is ***NOT*** a sarcastic comment but a serious one.  If you had read the T&C of the forum as required when you signed up, you would have noted that this is a forum open only for tax professionals, who understand the tax law and use this forum only as a point of reference before making a professional judgement as to the technical merits of the response and determine the proper tax treatment.  That is one of the reasons why the forum is not open to consumers, who should consult their own tax advisors to have a thorough review of their specific set of facts and circumstances.  Apparently, you knew you do not use Lacerte for tax preparation but have yet chosen that as your professional tax product.

[George4Tacks]

If you had hired me, I likely would have sent you on a different route and explained that S-Corp election can only apply to the period you were a Corporation. I would have also helped you to clarify whether this election would save you any money. Be sure to complete your I-9 and W-4 with your new employer, as you will be expect to draw a reasonable wage. I, too have had cancer and I understand the worry it gives the children. I am sorry you started off with such bad advice, but this is not the forum to get it corrected on.  If you did you would have to deal with screen 2.

[TaxGuyBill]

As a general rule, you will pay more in tax and penalties if you DON'T go to a tax professional.  So you really can't afford to NOT go to a tax professional.

Seriously, go to a tax professional for a "consultation" NOW, and have the tax preparer do the corporate tax return for AT LEAST the first year.

And no, a S-corporation does not automatically save taxes.  Depending on your circumstances, it could even cost you MORE.  Again, go to a tax professional.

[itonewbie]

"good job because Intuit just lost any future business I would have given them because of you."
@Beth_8274 Just so that you understand.  We are not related to Intuit by any means but tax professionals who volunteer our time, unpaid, to support our peers who are in the profession of tax preparation and advisory.

Hope you find the pointers George and Bill gave helpful.  Best wishes again to your mom and your family.

[Beth_8274]

Thank you George4Tacks, I am sorry I overreacted like that, as anyone can imagine with a dying parent, stress can come out at the wrong times and it did today and it was misdirected at you, you were simply trying to help. I've always been wary of posting on message boards or forums because in the past I've been met with sarcastic or rude answers instead of just a direct answer to my question so I think I took your answer as that and read way more into your reply than what was actually there, I mean you were simply asking if I had paid tax help, which I 100% should have and I will get it when I have enough money because forming an S-Corp is much harder than the books I read made it out to be. Thank you for your help and once again, I'm sorry if I upset you in any way with my over reaction and I send you only love.