Hey S-Corp people, I have a tax question

[Jay Rodriguez]

So mid last year I got an S-Corp established for film purposes which I haven't used for anything yet. I'm totally lost on what to do with reporting anything to the IRS this year because there hasn't been any movement at all and my accountant wants $500 to handle it for me which I don't have. She also said that I will have to apy the IRS $800 for my first year of having an S-Corp! Does anyone know anything about this stuff? I actually want to shut the corp down.

 

[TwistedLincoln]

A sub chapter S corporation is simply a regular corporation that files for a special tax status with the IRS. And basically, the main reason for doing this is so that you pay taxes on the business income on your regular personal tax return, rather than paying separately at the corporate rate. A better explanation is here: http://en.wikipedia.org/wiki/S_corporation

I had never heard of any $800 tax, but having read Wikipedia, it looks like the People's Republic of California makes you pay that regardless of if you've made any income. Is your corporation registered in California? If it is, you'll probably have to pay last year's fee even if you dissolve the corporation. But keep in mind that you're paying California, not the IRS, so that isn't a universal rule. I'm incorporated in Missouri, and there is no such rule here.

If you do dissolve it, I still highly recommend forming a new one elsewhere. Having a corporation set up is always handy, even if you aren't actively using it. I hear that Delaware is a good place to set up, due to their lack of state corporate income taxes.

Depending on your patience, it's totally possible to do it all yourself without an accountant. I do all of my S-Corp's taxes myself. It takes a couple of hours, but really isn't that difficult if you pay attention to everything and keep good records.