S Corporation Tax Preparation Services
Bring your books, payroll and shareholder records into one defined filing process. Discuss Form 1120-S preparation and the related owner-return handoff.
Connect the company return, payroll and shareholder reporting
An S corporation return should tell the same story as its books, payroll records and shareholder schedules. AE scopes Form 1120-S preparation around those connections, including agreed state returns and owner handoffs.
This service fits owners with established or newly elected S corporations, distributions, shareholder loans, benefits or several states. A first-year election, ownership change or transition from a prior preparer deserves attention before the filing deadline.
The work behind the filing
Books to return
Reconcile the profit and loss statement and balance sheet, identify book-to-tax differences and review fixed assets, loans and owner transactions.
Payroll and benefits
Compare officer wages, W-2s and payroll reports with the books. Flag compensation and shareholder health-insurance questions for resolution with the responsible payroll professional.
Shareholders and basis
Review ownership changes, distributions, contributions and direct shareholder loans. Define responsibility for stock and debt basis schedules, including Form 7203 where required.
K-1s and states
Prepare the agreed entity return and shareholder K-1 package. Identify resident and nonresident state filings, elections and owner-return coordination required by the scope.
Before preparation begins
- Prior Forms 1120-S and K-1s, election acceptance or other election records, and state notices.
- Year-end reconciled books, general ledger, bank and loan reconciliations and fixed-asset schedules.
- Payroll reports, Forms W-2 and records of shareholder health premiums and reimbursements.
- Shareholder stock and debt basis schedules, capital contributions, distributions and loan documents.
- Ownership changes, stock transfers, operating locations and states where owners reside or work.
Company cash and shareholder basis are different figures. A guarantee of company debt does not automatically establish shareholder debt basis. When records are incomplete, agree on a reconstruction assignment rather than assuming the prior balance is correct.
Example: profitable company, distributions and a shareholder loan
Illustrative preparation scenario. An owner receives wages and distributions, then advances personal funds to the company near year-end. The return review distinguishes payroll, distributions, capital and bona fide debt. It also reconciles what the business paid for shareholder health coverage.
A compensation analysis can support future owner-pay decisions. Correcting payroll or reconstructing historical basis may require additional work; neither is automatically completed by filing the income tax return.
What to confirm before you engage
Preparation and planning
Return preparation reports the year’s activity. A separate planning assignment can evaluate next year’s decisions. Identify each deliverable and the person responsible for implementation.
Fees and timing
The quote depends on entities, properties, states, record quality and prior-year issues. Bookkeeping cleanup, amendments, studies, payroll corrections and additional returns must be expressly included or separately priced.
Review published advisory pricing for context. A planning fee is not automatically a quote for return preparation. Agree on the tax year, forms, filing jurisdictions, review process and document cutoff before relying on a delivery date. An extension generally extends filing time, not payment time.
S corporation filing questions
Is reasonable compensation analysis included?
Confirm it in the engagement. Preparing Form 1120-S is different from documenting a compensation analysis, processing payroll or amending employment returns. AE offers a separate owner compensation review.
Does the entity return include my personal return?
Only if expressly included. The entity K-1 feeds into shareholder reporting, but each personal and state return needs an agreed scope and responsible preparer.
Can you prepare the first return after an S election?
Discuss election status, effective date, prior tax classification, payroll readiness and opening balances. Late elections, conversions and prior-year corrections can require a separate assignment.
Does every distribution avoid tax?
No. Distribution treatment depends on stock basis, corporate history and other facts. Loss deductibility also involves basis and other limitations; a K-1 loss is not automatically deductible.
Continue your S corporation review
References: IRS Form 1120-S, Form 7203 and shareholder compensation and medical insurance guidance.
Start with the decision and the records.
Tell us the entities, properties or income sources involved, the tax years to address and any approaching deadlines. We will discuss fit and define the work in writing before an engagement begins.
Published by AE Tax Advisors · Updated October 24, 2026. General educational and service information. Your signed engagement defines the work, responsible professionals and fees. Tax treatment depends on your facts and the applicable tax year.
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