Your First 90 Days with Collective for S Corps

This guide is for members on the S Corp tier. It covers how to reach your team, what to expect month to month, and the key deadlines in your first year as a Collective member. If you're on the LLC tier, see Your First 90 Days with Collective for LLCs.

Getting in Touch

The easiest way to reach us is by sending a message via Get help in your Collective Dashboard. This will launch a knowledgeable chat feature that will provide you an instant answer and can escalate to a specialist if it isn't able to fully resolve your question.

You can also browse or search our Help Center any time.

Paying Yourself

As an S Corp owner, you're an employee of your business. You pay yourself a salary through payroll and take additional profit out as shareholder distributions. Keeping the two separate and consistent is how the IRS expects S Corp owners to be paid.

1. Run payroll consistently on the schedule you choose. Monthly works well for most members, but you can pick the frequency that fits your business. Consistency matters because the IRS expects regular compensation for S Corp owners. See Running Payroll at Collective for a walkthrough.
2. Set a reasonable salary. S Corp owners who work in the business need to pay themselves a reasonable salary for the work they do. Use Understanding Your Reasonable Compensation Range as a reference.
3. Understand shareholder distributions. Shareholder distributions are how you take profit out of your business for personal use beyond your salary. They aren't a business expense and don't reduce your business's taxable income. As an S Corp, you're taxed on total business profit, not on the distributions themselves. Distributions don't need to be the same each month, but avoid draining the business account. As a best practice, keep at least two months of salary plus typical business expenses in the business account as a cushion for payroll, taxes, and unexpected costs.

Monthly Rhythm

Two monthly tasks keep your books current, which makes tax time smoother and gives you an accurate view of how your business is doing.

1. Provide bank and credit card statements. This is the most important monthly step in keeping your books up to date. Many banks support automatic statement uploads through your Dashboard. If available, you can enable this feature in the Settings section of your Dashboard. If your bank doesn't support automatic uploads, or you choose not to enable them, upload your statements manually each month so our Accounting Team can reconcile your accounts and keep your books accurate. Important: Only connect your business bank and credit card accounts. Personal accounts don't need to be connected.
2. Submit your Accountable Plan reimbursements. If you have mixed-use expenses (like your home office, phone, internet, or business mileage) or business expenses you paid with personal funds, submit them through your Accountable Plan in Accounting > Reimbursements. Submitting monthly matters: each expense needs to be submitted within 60 days of when you paid it to stay a tax-free reimbursement, and only expenses from your S Corp election date forward qualify. Once your plan is submitted, transfer the total from your business account to your personal account. If you had no expenses that month, submit the form for $0. Receipts usually aren't needed unless a single expense is around $2,500 or more, or it's something you'd like documented for extra support.

Quarterly: Estimated Tax Payments

Payroll withholding covers taxes on your salary, but your share of S Corp profit also flows to your personal return, and nothing is withheld on it. Quarterly estimated payments are how you cover that tax during the year instead of all at once.

1. In most cases, you'll need to make quarterly estimated tax payments toward personal income tax if you expect to owe $1,000 or more for the year after withholding.
2. Payments are made under your name and SSN, from your personal account, since they're personal taxes rather than a business expense. We recommend setting up an Individual Account online with the IRS to make payments and view your account details and history.
3. The Quarterly Tax Estimate (QTE) tool in the Taxes tab of your Collective Dashboard calculates your estimates using the IRS safe harbor method, which is based on last year's taxes and can protect you from underpayment penalties. If your income has grown, you can increase your payments or use the guided estimates option. Your team is happy to walk through it with you. Your state may also require estimated payments; see Making State Quarterly Tax Payments.

Federal payments are typically due on these dates (if a date falls on a weekend or legal holiday, it moves to the next business day):

• Q1: April 15
• Q2: June 15
• Q3: September 15
• Q4: January 15 of the following year

Yearly Milestones

1. Depending on your state, you may have an annual LLC renewal or annual report requirement. Your registered agent typically sends reminders when it's due. State annual filings aren't included in Collective's services, so keeping them current is up to you. If you'd like a second set of eyes on what you're seeing, reach out to your Collective team.
2. Collective prepares and files your S Corp Business Tax Return (BTR), Form 1120-S, as part of your S Corp tier membership. For calendar-year businesses it's due March 15, or we can file a six-month extension if needed. Your BTR needs to be filed before your personal return can be completed, since your share of business profit flows onto it.
3. Your Individual Tax Return (ITR) is due April 15, or a six-month extension can be filed if needed. An extension gives you more time to file, not more time to pay, so any tax owed is still due by April 15. ITR preparation is available to S Corp members as an annual add-on, and you can add it directly from your Collective Dashboard when the time comes.

Common Expense Questions

1. Unsure whether something is typically deductible or where it usually falls? This is a great starting point.
2. Had business activity before your S Corp start date and need to report Schedule C income and expenses for part of the year? This article explains how to handle it and includes a workbook to help.
3. Accidentally paid a business expense personally? It's fixable. Log it in Accounting > Reimbursements under Out of pocket within 60 days, and our Accounting Team will add the expense to your S Corp's books. If you accidentally paid a personal expense from your business account, add a note on that transaction in the Accounting section of your Dashboard, or send us a message, and we'll categorize it as a shareholder distribution.

Next Steps

If you have questions specific to your business, reach out directly from your Dashboard. We're here to help. 

This content is for informational purposes only and is not legal, financial, or tax advice. Deadlines listed reflect Collective's operational requirements to ensure timely delivery of services. Failure to meet these deadlines may result in delays to your tax filings and IRS penalties and interest, for which Collective is not responsible.