S corporation tax services with the details covered
We prepare Form 1120-S, coordinate shareholder returns, and help you manage reasonable compensation, distributions, and the requirements of your S election.
* We will contact you to arrange a call about your situation, service scope, and pricing. Specific tax advice and ongoing planning are provided under an engagement.
S corporation tax preparation & planning
Pass-through taxation, with responsibilities at both levels.
An S corporation is an eligible corporation or other eligible entity that elects S corporation treatment for federal tax purposes. Its income, deductions, and credits generally pass through to shareholders, while certain built-in gains and passive income can still produce entity-level federal tax.
Mraz Tax Solutions LLC provides S corporation tax preparation and planning for closely held businesses and shareholder-employees. We coordinate the corporate return with compensation, distributions, basis records, state filings, and the owners’ personal tax returns.
Part of our complete business tax preparation and planning services for Orange County and clients nationwide.
How we help
Practical support for your business taxes.
Preparation, planning, and advice that connect your business decisions with your tax return.
S-Election Planning
We review eligibility, ownership, effective dates, and Form 2553 requirements before you elect S status, including whether late-election relief may be available.
Form 1120-S & Shareholder Returns
We prepare the S corporation return and K-1s and coordinate pass-through items with shareholders’ individual returns and estimated tax planning.
Reasonable Compensation
We review the services shareholder-employees perform, wages, and distributions, using role-based analysis and supporting records to establish a defensible compensation approach.
Basis, Distributions & Losses
We help maintain stock and debt basis records, review cash or property distributions, and assess whether losses are deductible under basis, at-risk, and passive activity rules.
Payroll & Shareholder Benefits
We advise on the tax treatment of officer wages, payroll reporting, expense reimbursements, and shareholder health insurance, coordinating the records needed for the business return.
California & Multi-State Compliance
We review state filing obligations, sourcing, applicable entity taxes, and owner-level reporting so federal pass-through treatment does not obscure state responsibilities.
Decisions worth planning for
Make the S election work beyond the first return.
Potential tax savings depend on how the business is operated, how owners are paid, and the costs of staying compliant. We review the whole picture rather than relying on a fixed salary/distribution split.
Keep the Election and Ownership Eligible
S status generally requires a domestic eligible entity, no more than 100 shareholders, allowable owners, and one class of stock. Form 2553 generally is due within two months and 15 days after the start of the tax year it is to take effect, or during the prior year. Ownership changes and missed elections deserve prompt review.
Support Compensation with the Work Performed
There is no universal IRS-approved percentage of profit that makes a salary reasonable. We review duties, experience, time, and comparable wages. A written report can document the analysis, but it does not guarantee IRS acceptance.
Explore reasonable compensation reportsTrack Basis and State Costs Separately
A K-1 does not, by itself, establish shareholder basis. Stock basis affects non-dividend distributions; stock and qualifying debt basis can affect loss deductions. California’s first-year minimum-tax exception does not eliminate tax on first-year net income. We review the return and ownership records together.
Questions & answers
Frequently Asked Questions
Business structure and tax treatment are connected, but they are not the same thing. We help you understand which rules apply to your business and its owners.
Request a free initial consultation Can my LLC elect S corporation tax treatment?
Yes, if it meets the S corporation eligibility requirements and makes a valid election. An eligible LLC can generally use Form 2553 without filing a separate Form 8832 under the applicable rules. The legal entity remains an LLC, but its tax reporting and payroll obligations change.
Do shareholders owe tax if profits stay in the company?
Generally, yes. Shareholders report their allocated S corporation tax items even if the business retains the cash. We coordinate K-1 reporting, distributions, basis records, and estimated payments so owners can plan for the resulting tax.
What happens if a working shareholder takes distributions but too little salary?
The IRS can reclassify non-wage payments as wages to the extent they represent reasonable compensation for services. That can create employment tax, penalty, and interest liabilities. We review the work performed and compensation records rather than applying a standard percentage.
What if the business stops meeting the S corporation requirements?
An ineligible shareholder, a second class of stock, or another eligibility failure can terminate the S election and result in C corporation tax treatment. Corrective action or relief may be available in some circumstances. Contact your advisor before ownership or financing changes are finalized.
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Get in Touch
Have any questions?
Let's talk.
Request a free initial consultation to discuss your situation, service scope, and pricing. We will contact you to arrange a call. Specific tax advice and ongoing planning are provided under the terms of an engagement.
Office visits are by appointment. We accept tax-document drop-offs after a signed engagement agreement and by prior arrangement. Please request an appointment before visiting.
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