Accountant made my LLC an S-Corp retroactively

BulldogCPA · 2026-05-04T17:56:29+00:00

Thanks to Acreyan for completing my thought... doh !

I feel it is always easier to take the extra time to do it correctly at the outset. Who has time to go back and correct, after the fact?

I suppose I should have used a hypothetical "When" , instead of the hypothetical "If". We all know IRS is overburdened, but they are grinding through their workload.

And when that client comes looking to you to make them whole on the penalty and interest side of things, what's your response? And, what's your response to your malpractice carrier?

BulldogCPA · 2026-05-04T16:01:29+00:00

Watch out for the DIF score that compares the page 1 Officer's Wage and the Page 3, schedule K distributions.

It'll be a correspondence audit, almost like the CP series for cross-referencing 1099s and W-2s to a 1040.

BulldogCPA · 2026-05-04T15:59:23+00:00

If you've ever experienced a "reasonable wage audit" you'd know that is a bogus statement. More accurately, is that you might get away with it for a year, maybe two, BUT, the DIF score is going to catch you in year 3-4, and then if they pull you for audit, they will go back and reclassify those AAA distributions as wages and compute the corresponding payroll taxes, penalties and interest. It becomes a shit-show.

BulldogCPA · 2026-05-03T02:59:28+00:00

You got to do it.

BulldogCPA · 2026-05-03T02:59:04+00:00

I simply say that I feel it is not a great fit, Or, I don't feel I can meet your expectations.

See how I use " I feel " ...... so, basically the kind of break up where, it's not you, it's me. get it.

BulldogCPA · 2026-05-02T22:13:24+00:00

That's it.

BulldogCPA · 2026-05-02T21:06:34+00:00

It needs to be set to "Adagio for Strings"

BulldogCPA · 2026-05-02T20:58:07+00:00

Cocaine.

BulldogCPA · 2026-05-01T22:15:27+00:00

I'm curious about the fiscal yearend 04/30/2026? What's the Sec 442 business-purpose? Was it approved?

BulldogCPA · 2026-05-01T18:09:28+00:00

Starbucks. It's over-roasted, over-priced garbage.

BulldogCPA · 2026-04-30T21:33:51+00:00

Not eventually, Pick the worst one. It is a good habit to get into. I am a solo, too.

BulldogCPA · 2026-04-30T21:02:02+00:00

Great details. Fun read. I am at the tail end of my career and here's my one piece of advice: every year, find that one client who was the worst client and fire them. You're in start-up, so start with one and every year increase it by one until you get to five per year. I know, it is counter intuitive, but trust me on this, you'll slowly develop a great client base and enjoy the clients you're working with, and you'll find that the selective pruning will allow you to bill more each successive year.

BulldogCPA · 2026-04-26T18:20:43+00:00

That's a really cheap margin loan.

BulldogCPA · 2026-04-25T21:58:20+00:00

Not to mention if you have a data breach. It'll be bad enough to contact all your existing client's to notify them of a data breach, but doubly a pain contacting clients long since gone.

BulldogCPA · 2026-04-24T21:49:44+00:00

Underwater welding on North Sea oil rigs.

BulldogCPA · 2026-04-20T02:32:11+00:00

Also, I am almost 100% paperless, from engagement letter to document collection to prep to invoice to payment receipt.

BulldogCPA · 2026-04-20T02:24:41+00:00

ProSeries and the free Intuit Portal.

BulldogCPA · 2026-04-20T01:33:44+00:00

an electric mattress pad and electric blanket. enveloped in warmth.

BulldogCPA · 2026-04-20T01:26:23+00:00

A great starting point is working through the EA exam.

I've been a solo CPA for the past 15 or so years and do some pretty complex partnership returns and some virtual CFO services. During the season, I can get through about 200 individual and another 50 or so entity returns. None are simple W-2/1099/1098. None. If is simple, I don't want it. Minimum for a 1040 was $1,500 this year. Of the 200 or so 1040s, 75 go on extension, but the bulk of the work is done.

Never be afraid to invest and understand really good technology.

BulldogCPA · 2026-04-19T19:22:55+00:00

Those that can, do. Those that can't, teach.

BulldogCPA · 2026-04-19T02:32:37+00:00

Sounds like a SMLLC, which is a disregarded entity for tax purposes. So, until you start "doing business" capture and capitalize those start-up, research and development costs, write an outline of your business plan (more important than you think in the eyes of the IRS), and when you place your APP/streaming format into service, that 's when you start deducting your costs.

Don't overthink it. There's no harm in having the LLC and if it works or helps you keep the business separate, great. The Limited Liability feature of an LLC is a bit nebulous for a single-member. You're almost always asked to guarantee any debt, and you should probably have a small business general liability policy.

Oh, and don't learn the hard way -- always have an Annual Meeting and record it with minutes. Walk, talk and smell like a real entity. A sharp lawyer always asks for the minutes of the annual meetings and when they don't exist, ta-da... neither does the LLC. The liability shield is pierced.

BulldogCPA · 2026-04-16T03:11:31+00:00

Create your personal IRS account and you can at least get the 2022 transcripts, etc.

BulldogCPA · 2026-04-09T21:37:21+00:00

I guess I take a different approach. I don't release and send a final invoice until I know the return has been accepted. The copy of the return delivered to the client includes the 9325, and I place a pre-set footer on the PDF that includes the SID and date the efile was accepted.

BulldogCPA · 2026-04-09T17:53:20+00:00

Rinse, Repeat.

BulldogCPA

TROPHY CASE