In 2013 I started a small business as a sole proprietor and paid taxes accordingly. On Dec 7, 2014, I incorporated in the State of Illinois. I got my EIN number from the IRS on 12-17-14. I am planning on filing form 2553 very soon. I have not started a bank account or paid in capitol yet.

Do I need to file form 1120-S and 1120-ST 3-15-15 even if I haven't made any money or officially started the corporation? Is there a way to start my tax year on Jan 1, 2015 and avoid the extra fees and paperwork associated with filing for 2014?

On form 2553 in Section E, what should my effective tax year election date be?

Is there a way to lower my taxes for the year 2014 and avoid onerous filing fees associated with the S-corporation?

Do I need to file form 1120-S and 1120-ST 3-15-15 even if I haven't made any money or officially started the corporation?====>>>>>>>>>>>> The election to be taxed as an S corp generally has to be made by a specific date in the early part of the year by the 15th day of the third month of the tax year .IRS election to be an S corp in 2014 is due early in 2014 so, it is too late. For a corp to be an S corp for the 2014 tax year, Form 2553 must be properly filed by the 15th day of the third month of the corporation’s tax year , I mean e.g., by March 15,2014 aslongas your tax year begins January 1, 2014.as the election is not filed in time for the current tax year i.e., for 2014, it will take effect the next tax year for 2015. Once the S election is made, it is effective for all succeeding tax years until terminated ;you don’t have to re-elect every year. If a business finds it has missed its election deadline, IRS late election relief is available for businesses that meet the relief criteria.. Businesses asking the IRS for relief regarding a late S corp election needs to have reasonable cause for failing to make the election in the first place. Also, upon discovering their mistake, they have to had acted diligently to correct it. Any election or request for relief has to satisfy detailed IRS requirements that depend on your situation .you may consult your advisor as early as possible about making any elections or requesting for relief.
Note; the election can be attached to the first Form 1120S for the year including the effective date if filed simultaneously with any other delinquent Forms 1120S. Form 2553 can also be filed separately. A late election to be an S corporation generally is effective for the tax year following the tax year beginning on the date entered on line E of Form 2553. However, relief for a late election may be available if the corporation can show that the failure to file on time was due to reasonable cause. To request relief for a late election, a corporation that meets the following requirements can explain the reasonable cause in the designated space on page 1 of Form 2553. 1.The corp intended to be classified as an S corp as of the date entered on line E of Form 2553;2.The corp fails to qualify as an S corp on the effective date entered on line E of Form 2553 solely because Form 2553 was not filed by the due date; 3.The corp has reasonable cause for its failure to timely file Form 2553 and has acted diligently to correct the mistake upon discovery of its failure to timely file Form 2553; 4.Form 2553 will be filed within 3 years and 75 days of the date entered on line E of Form 2553; and5.A corp that meets requirements (1) through (4) must also be able to provide statements from all shareholders who were shareholders during the period between the date entered on line E of Form 2553 and the date the completed Form 2553 is filed stating that they have reported their income on all affected returns consistent with the S corp election for the year the election should have been made and all subsequent years. Completion of Form 2553, Part I, column K, Shareholder's Consent Statement (or similar document attached to Form 2553), will meet this requirement; or 6.A corp that meets requirements (1) through (3) but not requirement (4) can still request relief for a late election on Form 2553 if the a.The corporation and all its shareholders reported their income consistent with S corp status for the year the S corp election should have been made, and for every subsequent tax year (if any); b.At least 6 months have elapsed since the date on which the corporation filed its tax return for the first year the corporation intended to be an S corporation; and c.Neither the corporation nor any of its shareholders was notified by the IRS of any problem regarding the S corporation status within 6 months of the date on which the Form 1120S for the first year was timely filed



Is there a way to start my tax year on Jan 1, 2015 and avoid the extra fees and paperwork associated with filing for 2014? ========>>>>>>>>>>as mentoned above; you need to file youe 1120s in 2015,NOT in 2014, UNLESS you are allowed relief from IRS.

On form 2553 in Section E, what should my effective tax year election date be?=======>>>>>>>>as above.

Is there a way to lower my taxes for the year 2014 and avoid onerous filing fees associated with the S-corporation?======>>>>>>>>>>>>>>>as mentioned bove. In general, S corps do not pay any federal income taxes. Instead, the corp's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.

Thanks for the Help Winhough. You have clarified a lot. It looks like I'm going to file as a sole proprietor for the tax year 2014. Do I still need to file C corporation stuff for the few weeks I had a C corporation? Now, if I understood you correctly, my objective is avoiding accounting and filing fees for a C corporation.

I'm thinking that my best bet now is to go to an accountant. Are there any credentials or professional designations that I should look out for? I used to be a real estate broker and I'm assuming that accountants need to be licensed by the state they practice in, have malpractice insurance, etc. Are there any trade associations that have outstanding ethics requirements, codes of conduct, etc?

Thanks for the Help Winhough. You have clarified a lot. It looks like I'm going to file as a sole proprietor for the tax year 2014. ======>>>>>>>correct;please read below

Do I still need to file C corporation stuff for the few weeks I had a C corporation? Now, if I understood you correctly, my objective is avoiding accounting and filing fees for a C corporation. ==========>>>>>>C corp??? You mean an S corp right?? as said no; you do not need to file Sc orp return,form 1120S. as mentoned above; you need to file your 1120S in 2015,NOT in 2014, UNLESS you are allowed relief from IRS

I'm thinking that my best bet now is to go to an accountant. Are there any credentials or professional designations that I should look out for?========>you may contact either IRS EA or a CPA in your local area for more accurate info in detail for your fed/state returns.

I used to be a real estate broker and I'm assuming that accountants need to be licensed by the state they practice in, have malpractice insurance, etc. ======>It depends; it varies from state to state. unless your home state is CA, OR NYS, Virginia or Maryland, I do not think that a tax preparer necessarily needs to be licensed UNLLESS he/she is a CPA/an IRSEA.

Are there any trade associations that have outstanding ethics requirements, codes of conduct, etc?====>>>>>> IRS Circular 230 is a 48-page publication that sets forth the rules and standards for both attorneys and CPA or IRSEA who practice in the field of tax preparation and representation. Tax professionals are in a unique position because the work they do for their customers leaves their customers responsible for any mistakes made or potential fraudulent claims. Once you sign the return, or the electronic equivalent, you, as the taxpayer ,assume full responsibility for the information provided. The key job of a tax professional is in his knowledge and the application of that knowledge to protect his clients from possible fines or penalties.