I opened my business in Oct 2008, an S-corp in Texas, and only paid myself through our payroll service, all taxes taken out and paid. There were no profits or distributions. Do I need to do anything special on my personal tax return? Do I need a K-1 if there were no payouts other than payroll?

Did I post in the wrong section? Anybody? Anybody?

You are required to file an S corporation tax return for the tax year 2008. Despite having only taken a payroll in the form of W-2 income, the IRS requires that you must file the S Corporation tax return even though there me be no profit or loss from the S Corporation.

The K-1 showing no reportable income or activities does not excuse non-filing of the S corporation tax return. I suggest that you contact your CPA to file this return as soon as possible to avoid incurring additional potential late filing penalties.

In addition, Texas State requires that you must file a Texas Franchise Tax return as well. There may be a minimum Texas Franchise tax due upon the filing of the tax return.

So, you must file the S Corporation for the reasons mentioned above.

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My CPA filed the S-corp return and what is now the Texas Margin(Franchise) tax return, but I filed my personal return separately without the K-1. My CPA informed me she was going to have to go back and refile my personal return because I didn't file it with the K-1.

Does she need to refile my personal return with the K-1? Will there be any personal tax benefits gained by refiling?

Thanks,
Tim

There may be some activity that is reported on the K-1 and I strongly suggest that you include this reportable activity on the amended tax return.

I am not sure whether or not you would receive any personal tax benefit. However, I suspect that there may a loss on the S corporation stemming from the expensing of the Start-up Business Expense (Cost of Start the Corporation) along with any other business related expenses that you incurred in 2008.

Irrespective of the amount of K-1 Activity, you should file an amended tax return to avoid possible IRS penalties!

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Thank you, exactly what I needed to know.