Services
S-Corporation tax services
KDM prepares Form 1120-S, Schedule K-1 and the owner’s Form 1040 for a flat $950 for a single-shareholder S-Corp, with no upcharge for the personal return. Returns for 2–5 shareholders start from $1,800; a reasonable-compensation memo ($500) and basis schedule ($300) are priced separately.
Return preparation, owner pay or a late election?
Preparing a return: bring the election acceptance letter, current books, payroll reports and prior returns. Reviewing owner pay: start with the work performed and supporting compensation records. Missing an election: request a late S-election eligibility review before assuming prior years can be changed.
For background, compare LLC structure and S-Corp taxation, read the owner-compensation guide and review the cash available for owner pay. These are different decisions; one salary percentage or profit threshold cannot answer all three.
What your engagement covers
The scope is agreed in writing before work starts.
- Form 1120-S and Schedule K-1 for each shareholder.
- Owner compensation review and supporting documentation.
- Stock and debt basis schedules, using the records you provide.
- Coordination with the owner’s Form 1040 and estimated tax payments.
- Separate review of state returns and pass-through entity tax elections where relevant.
Is S-Corp taxation right for your business?
An S-Corp is a federal tax classification available to an eligible corporation or LLC. It can reduce employment taxes in some circumstances, but adds payroll, filing and recordkeeping costs. Compare those costs with the potential benefit using your profit, duties, other wages, ownership and state obligations. There is no universal income threshold.
Salary, business income and distributions
A shareholder who works in the business may need reasonable W-2 compensation before receiving non-wage distributions. Salary depends on the work performed and comparable pay—not a fixed percentage of profit. Shareholders generally report their allocated business income whether or not the cash is distributed. A cash distribution is a separate basis calculation; it is not automatically tax-free.
Why basis records matter
Stock and debt basis help determine whether losses are deductible. Stock basis also affects the tax treatment of non-dividend distributions. Other loss limitations may still apply. Keep capital contributions, shareholder loans, repayments and distributions separately documented.
What to bring
Start with the most recent business and personal returns, year-to-date financial statements and the IRS election acceptance letter.
- Ownership and shareholder changes.
- Payroll reports and a description of each working owner’s role.
- Prior basis schedules and shareholder loan records.
- States where the business has employees, property, customers or operations.
How the work moves forward
We review the records, identify missing items, confirm the scope and prepare the returns. You review and authorize filing. Bookkeeping and payroll processing are separate services unless included in your written engagement.
Published fees
| Item | Complexity | Typical flat fee |
|---|---|---|
| 1120-S + owner 1040 — single shareholder bundle | Corporate return + personal 1040 included (no upcharge) | $950 |
| 1120-S — 2-5 shareholders | Multi-owner, K-1 per shareholder (each owner 1040 separate) | from $1,800 |
| Annual reasonable-comp memo | Nine-factor analysis with comparables | $500 |
| Basis schedule (annual maintenance) | Stock + debt basis under §1366/§1367 | $300 |
| Owner 1040 with K-1 (additional shareholders) | Schedule E flow + §199A QBI — beyond the first owner | from $450 |
| Late S-election relief | Rev. Proc. 2013-30 retroactive filing | from $1,500 |
Final scope and fee are confirmed in writing. Additional work is quoted separately.
Questions and answers
Does an S-Corp eliminate income tax?
No. Business income generally passes through to shareholders. Certain federal entity-level taxes and state taxes can also apply.
Can an LLC elect S-Corp taxation?
An eligible LLC can elect S-Corp treatment. The tax election does not replace its state-law LLC structure.
What if I missed the election deadline?
Late relief may be available, but eligibility depends on your facts and filing history. See our late S-election page before assuming prior years can be changed.