Accountant for LLC Alternative The return that matches the books
A beautiful set of books on the wrong form is a wrong year.
One letter, one family of forms
Disregarded usually means the company lives on the owner's personal return. A partnership produces a form each owner then carries. An S election produces a company return and a share the owner reports. A C corporation files its own return and does not hand the profit through.
When two returns exist, they have to tell the same story about what the owner took. A wage on one and a silent draw on the other is how years go wrong. A second preparer who never saw the month is a common way the story splits. We would rather the month and the return come from one practice.
A family habit that has not changed in decades is a comfort. We can respect a choice that stayed one thing for a long time. An election letter should be that steady. One choice, kept, and the return that follows it, year after year, without a new guess each April.
The S election is a form, not a new company
Electing S does not dissolve the LLC and it does not require a new state charter by itself. It is a federal choice with a deadline measured from the start of the tax year, and a late path when that window was missed. We name the path. We do not sell it as automatic.
Reasonable pay is the point examiners look at when wages are thin and distributions are fat. We will talk about what the owner actually does, and we will not invent a salary to make a model look clever. Wages also change the shape of the qualified business deduction. Below the income phase-in, wages can shrink that deduction. Above it, wages can be what keeps the deduction alive. The model comes before the election, not after the return is filed.
If you told a prior year that an S company exists and the personal return shows no share, the company return may be late. That is an exposure, not a style choice. Finding the letter, or confirming there never was one, is the first hour of that work.
A holding company is still taxed one way
Some LLCs hold rentals and then get dropped on a business schedule with no sales. The rent usually belongs on the rental schedule of a disregarded company, not on a schedule that implies an operating trade. State fees can still exist even when the federal form is quiet.
We separate that case from an operating company that elected S and then forgot the company return. They look similar in a messy file and they are not the same repair.
If the letter is in the file, say which election it shows. If the only thing you have is the certificate, say that. We will tell you which return family follows, and what is still unknown. The letter and last year's return should be read side by side.
Name the return
Name the election if you know it. If you do not, say what returns you filed last year.
You will be talking to the Steven Palmieri practice.