What you need to know
If your business was up and running before the date noted in Box E of your Form 2553, it's crucial to report all income and expenses from that period on Schedule C. This ensures everything is accurately accounted for and properly reported to the IRS.
For example: The Schedule C timeframe for the business above would be January 1, 2021 - September 17, 2021
How to gather and report your data
Joined Collective mid-year? No worries! If your S Corp election wasn't effective from January 1st, we've got a handy workbook designed to make gathering your data a breeze.
This workbook will help you document all Schedule C income and expenses for the year up to the day before your S Corp start date. For instance, if your S Corp started on September 18, 2021, your Schedule C reporting period would be from January 1, 2021, to September 17, 2021.
Navigating the Workbook Tabs
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Introduction: Start by listing your business name (if applicable), your name, and the specific timeframe for the included information.
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Expense & Income Categories: Here, you'll find categories corresponding directly to those on the Schedule C form. This tab is for informational purposes and will help you accurately complete the next sections.
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Download from Bank/Credit Card: You can download transactions from your credit cards and bank accounts for the specified period. Please use the dropdown options that match the categories from Tab 1.
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Purchases Over $2,500: List any purchases of $2,500 or more within the year. Include details like the vendor, total amount, date of purchase, and whether the item was paid in full or financed.
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Home Office Expenses: If you have a dedicated office space, record expenses such as rent or mortgage, utilities, internet, and cell phone costs on a monthly basis.
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Additional Queries: If you have any specific questions or if there's additional information our tax team should know, this is the place to note them down.
If you have specific questions as you fill out your information, don't hesitate to reach out to hello@collective.com. We're here to help ensure that your transition to S Corp status is as smooth and accurate as possible.
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.