Do you have an S Corporation? The IRS might have a couple of things they’re going to talk to you about. Here’s a few questions to get ahead of the IRS audit that might be coming your way (if you have an S Corporation):
Question #1: Do you take a salary? And if you do, do you report it as an Officer Salary on your Form 1120S?
If you say ‘no’ to either question, the chances are really good that you’re going to get an audit notice.
Make a note, if you own part of the company, you need to report the premiums on your Form W-2.
Question #3: Are you properly tracking your stock and debt basis?
You don’t need to report this to the IRS when you file (yet), but you have to be ready prove that you have a running total since day one that proves the amount of debt basis.
Tags: S Corporation • S Corporation audit • S Corporation stock • S Corporation tax issues • taxes and S Corporations