My First 1120S, Client's Final Return

[idawkrizman]

New client, his previous accountant is MIA. He closed and needs to file his final return; closed all bank  accounts June 2019 and notified the state. I filed his 940, OH and Fed W-3, W-2 for him to meet the filing deadlines and he was the only employee.  Now asking me to file his final 1120S. I have numbers but no experience doing this type of return.  I figured the sales and salary but not the payroll and IRA. How do I report his payroll taxes and ira contributions?   Any other considerations are also appreciated.

[sjrcpa · Accepted solution]

You should be working with a complete set of books-income statement, balance sheet, trial balance.

Since this is a first 1120S for you and a final 1120S for the client, you should probably get help from a colleague who has experience with S Corporations.

[IRonMaN]

But if the client had the Coronavirus and his doctor was MIA, would you begin treatment on him?  Stick to what you do well and leave the other stuff to someone who is experienced in those areas. 

[idawkrizman]

The main reason I took on this return is that the client has less than 10 transactions (payroll, taxes, legal fees paid, the close of his bank account) and one cash sale for all of 2019 so I thought it would be something I could do with a little guidance.  Yes, I am not an expert and I am trying to learn this process which is why I reached out to the support group.  If I was an expert, I wouldn't be on this forum.   I am sorry you think that I should just leave this to others.  That is not what I tell my accounting 101 students.  I try to explain the theory, process and I try to answer the questions they have.  That is how I teach them.  If you have a resource/Intuit training that helps with this it would be appreciated.

[sjrcpa]

Then put together the trial balance yourself. Employer payroll taxes get deducted as taxes. IRA goes on the 1040. It is not an S Corp expense. If S Corp funds were used to make the IRA contribution, that is a distribution. Unless you mean SIMPLE IRA which is a different animal.

Read the 1120S instructions. Read the 966 instructions. Find the corresponding state form and read its instructions.

[sjrcpa]

Oh, and in an S Corp liquidation all assets are deemed to be sold at their FMV and then distributed to the shareholders.

[IRonMaN]

"I am sorry you think that I should just leave this to others. That is not what I tell my accounting 101 students."

But this isn't a classroom and the additional details you provided were missing in your original post.  You have to realize, this is the internet and anybody and their brother can post questions here.  Believe it or not, this place is accessible to folks other than tax pros.  We have no idea of what anybody's background is and as in this case we usually don't have a lot of details to go by when someone wants help.  

As a side note, there are things that I do leave to others.  There are certain areas I won't touch because I don't have the necessary experience in and I'm not going to put a client at risk just because I'm too afraid to tell I client "I don't know".  As Dirty Harry once said "A man's got to know his limitations".