I am retroactively pursuing an S-corp for 2022. My income so far has been through my personal name and I have requested that the 1099 for 2022 income be in my business name instead of my personal name. I can’t seem to find if this is okay or not okay and wondering if you have ever run into this situation. The company’s CPA’s are stumped as to whether this could be a problem for the company or not. I have already received the compensation (checks) in my personal name and cashed them, even though I have a business but I just never submitted an updated 1099 for them to pay me in the company name.
First, the business entity that is electing S-Corp status had to be in existence on the S-Corp effective date. You can’t create an LLC or Corp in December 2022 and claim it earned income in January 2022.
If that timeline works, then simply include income on the 1120S corporate income tax return. Then on your personal return, complete a Schedule C and show the amount paid to you personally as income, with a corresponding “Other Deduction” with a description that includes the EIN of the S-Corp. This will effectively zero out the income on your personal return. Also, provide an updated W-9 to the payor showing the S-Corp EIN and the entity classification as S-Corp.
Covered on today’s show. 12/15/22. Thanks for the post! Please share and give us a 5 Star on your favorite portal if you would. Thanks again and please continue to listen. Mark.