Providing Business Taxation Solutions in Atlanta, Decatur and surrounding areas.
Your business tax return should match your entity structure, reported income, payroll filings, and state filing requirements. Accolade Accounting prepares and files federal and Georgia business tax returns, with a licensed CPA reviewing each return before submission.
The IRS compares business tax returns with payroll filings, 1099s, K-1s, and prior-year records already on file. When those numbers do not line up, the return can draw attention. These are common issues found when reviewing prior-year filings.
S corporation returns reporting officer compensation below what the IRS considers reasonable are a documented audit trigger.
Business expenses recorded in the wrong category, ordinary versus capital, can create discrepancies that require documentation.
Income reported across states without confirming filing requirements can lead to underpayment assessments and state tax notices.
Income reported across states without confirming filing requirements can lead to underpayment assessments and state tax notices.
The business tax return your company files depends on the entity type. It is not based on industry or revenue alone. Filing the wrong form, or reporting income and deductions under the wrong classification, creates the kind of mismatch the IRS can detect through automated review.
An LLC that elects S corporation taxation changes how owner income is treated for self-employment tax purposes. A multi-member LLC that skips Form 1065 because the owners thought it was not required can create a mismatch when K 1 income is reported on individual returns. These elections have deadlines. Once made, they also carry rules for revocation.
If you are considering a structure change. See our guide on Transitioning from an LLC to an S Corp.
Taxed at the entity level. Federal return due on April 15 for calendar-year filers. Georgia requires a separate Form 600. Estimated tax and extension filings should also be reviewed.
Income passes through to shareholders via Schedule K-1. Return due by March 15th for calendar-year filers. Officer compensation and shareholder payroll are common review points.
Informational return only. Income passes through to partners on Schedule K-1. Filing issues often happen when partner reporting does not match the partnership return.
Filing depends on tax classification. Single-member LLCs usually default to disregarded entity status. Multi-member LLCs usually default to partnership treatment unless another election is made.
Distributions from an S corporation are not subject to payroll tax. Compensation is. An owner who takes a minimal salary and draws primarily through distributions reduces their payroll tax bill, but it also produces a return that the IRS regularly flags. This is an area the IRS has taken to Tax Court, and the agency has a track record of prevailing.
Accolade Accounting reviews officer compensation as part of every S corporation return preparation. When reported compensation appears low for the work performed, the issue is reviewed before the return is filed.
IRS guidance: S Corporation Compensation and Medical Insurance Issues
If your business operates in more than one state, each state has its own rules for when you are required to file a tax return there. The threshold is based on the level of activity you have in that state, and it does not require a physical office.
Common Triggers
What it Costs to Miss State Tax Filing
Missing an out-of-state filing requirement is not just an unfiled return. States assess interest and penalties on unpaid tax dating back to when the obligation began, which can span multiple years.
Georgia has its own rules, as does every other state. When a return is required in multiple states, income has to be split across each one, typically using a formula based on sales, payroll, and property. Errors in that calculation are a consistent source of state-level notices and underpayment assessments.
Accolade Accounting is a CPA-led firm. If you receive a notice related to a return we prepared, or a return from a prior year, we review and respond to it promptly.
The business tax engagement starts with a review of your entity structure, recent filings, and any outstanding IRS or state notices. This establishes a baseline before preparation begins and identifies issues to be addressed before the return is filed.
Situations that commonly warrant CPA review include:
Each of these areas can affect how income is reported and how tax obligations are calculated. For a deeper explanation of these situations, see our guide on when to hire a CPA for your business.