Video instructions and help with filling out and completing When 1041 Schedule Instructions

Instructions and Help about When 1041 Schedule Instructions

Hey what's up guys this is Josh with CPA on fire and today we're going to look at how to fill out form 1120s which is the tax return for S corporations okay so the only people that would be using this form are people who have made an election to be taxed as an S corporation so we'll look at the beginning here you just go over the basic info part a wants to know your s lection effective date this will probably be January 1st of whatever year you made the election okay so let's assume that it was for this year all right so one 114 Part B wants to know your business activity code and this is just a code that describes what you do in your business you can find these online if you google tax code or a business activity codes it'll be a list from there for you there's tons and tons of them so you'll have to sort through and find yours ID you're using tax software it's probably going to give you a choice of them so for now it's a six digit code we're just going to use the one for other business which is nine nine nine nine nine nine all right so you come up here they want to know the name of your business so we'll just use mine as an example all right and they want to know your address this is the address of the business not your personal address for a lot of you that will be one in the same that's okay okay so 123 extra city or town okay so all basic information there box D here that's your employer identification number now this is not your social security number this is a separate tax ID number that you have for your business and you have to have one of these to be an S corporation so if you never got one you're probably not an S corporation it'll be a seven or a nine digit number two digits a dash and then seven more okay so you know what that number is the date incorporated so this is when you became either a corporation or an LLC okay so you had to do that before you became an S corporation you can find that in your articles of organization or whatever you use to set up your operation or LLC so we'll just assume that it was on the same day 14 total assets don't worry about this line for now um you'll you'll find out if you need to do that or not we'll talk about that here shortly okay so we go down to box G here or line G is a corporation electing to be an S corporation beginning with this tax year so if this is your first time filing in 1120 s and you never filed the form 2553 that you were supposed to file click yes okay otherwise click no line H check if one it's your final return so that would be if this is if you if your business was going out of business this was the last year that you had to file a tax return you're going to click that click box - if you had a name change during the current year 3 if you had an address change for if this is an amended return so if you ready filed your return you're just making changes to it now and 5 if the S selection termination or revocation okay so this is your last you're just filing as an S corporation ok so that's the basics there we get down to the fun stuff here the actual tax information so line 1 they want to know your gross receipts or sales what this number is is just your your the revenue you took in before any expenses so the exact amount that your customers paid you okay so if you made 150 thousand for the year that's where that goes and you always round up or round down to the nearest dollar so under 50 cents go down over 50 cents go up you never have to put a change on your tax return so one be any returns or allowances so if you had to make any returns to customers after they purchased so we'll say 5,000 there and then one see the final number here so after you subtract the gross receipts - the returns 145 thousand okay so lying to cost of goods sold this is the cost that you incurred to create the product or service that you sold okay so this is usually for people who sell a product so let's say that you sell tires okay you had to buy those tires for a price that price goes in to cost of goods sold so let's say so you bought tires for $50 sold them for $100 your cost of goods sold is that $50 if you're a service company there's a chance you'll have something here but usually you don't have anything in cost of goods sold so we'll leave that blank for now all right your gross profit you're just going to subtract line 2 from line 1c so subtract the cost of goods sold from your grocery seeds okay so it's still 145 for us in this case alright net gain or loss from forum 47 97 this is where gets a little tricky this is if you sold an asset so let's say you have machinery that you sold or something that you were depreciating in the past that you then sold you could have a gain or loss from that you're gonna report it here this is why I always recommend using a CPA to do this and not do it yourself but if you don't have anything online forth and don't worry about it we're going