Incorporation - how to close?

[ITLifer]

I had incorporated about 5 years ago. To be honest, after I got my FTE job, I did not do anything on it. As I do not need it anymore, I'm planning to close it. I have not made any money off of the incorporated company(S Corp). Will I be hit with taxes for the past few years when I close the business? Will the lack of earnings help me in avoiding them?

[The Original Henry]

You are supposed to file schedule K1 every year based on your share of the company's earnings, which would be 0 if there was no revenue. The only tax issue you might run into is if the company has assets in excess of your basis, but that doesn't sound it is the case if it has nothing and earned nothing. Standard disclaimers about relying on internet advice apply, but it doesn't sound to me like there would be any tax due.

[ITLifer]

Thanks! I understand standard disclaimers apply - Checking to see if I need to pay schedule K1 filing fees for the past years. Again no income and no assets. Would any penalties apply? I'm planning to go to H**Block - just wanted to get an idea of how much my damages would be.

[Richardk]

I believe that even if it's inactive or just no income, you still need to file on time so you might get dinged for that.

[The Original Henry]

Yes, if you haven't been filing your 1120S every year you'll probably get penalized for late filing for each year that you didn't file. I got penalized once for late filing and it was less than $100. I don't know if they charge interest on the penalties.

You'll still have to go back and file for each year, and I don't know how much Block will charge you for that. You can pick up a copy of TurboTax Business and just let it print the forms for you. The 1120S is a simple form to complete using software, especially when you had no activity to report. Block will probably just do the same thing using their version of the software.