Combining Small Business and Personal Tax Returns - Filing jointly?

S-corporations are separate legal entities from your personal finances, so you'll need to file separate tax returns for each S-corp (Form 1120-S). However, since S-corps are pass-through entities, the business profits and losses will flow through to your personal tax return via Schedule K-1. For your personal taxes, you'll still file jointly as a married couple (assuming that's what you want), and you'll include the K-1 information from both S-corps on your personal return. This is how the business income gets taxed at your personal tax rates rather than corporate rates. As for doing it yourself - while it's certainly possible, S-corp returns are significantly more complex than personal returns. There are specific rules about reasonable compensation, distributions, and business deductions that can get tricky. I'd recommend at least consulting with an accountant for the first year to make sure everything is set up correctly. After that, if you're comfortable with the process, you might be able to handle it yourself with good tax software.

After reading these responses, I wanted to share something that helped me enormously when I was in almost the identical situation last year. My husband has an S-corp and I was SO stressed about doing the taxes myself after handling our personal returns for years. I found this service called taxr.ai (https://taxr.ai) that basically analyzes all your tax documents and transcripts and tells you exactly what you need to do. It caught things I would have totally missed about how to properly handle the K-1 income and some deductions specific to my husband's business type. The best part was I didn't need to pay an accountant thousands of dollars - I could still do the returns myself but with this expert guidance. It's like having a tax professional look over your shoulder but for a fraction of the cost. Definitely worth checking out if you're comfortable with taxes but just need some extra guidance on the S-corp stuff.

Alright I need to eat my words about being skeptical of taxr.ai! I tried it last weekend after posting that comment and it was honestly really impressive. I uploaded my previous returns and my husband's S-corp documents, and it flagged three major issues I would have completely missed. The most valuable thing was it found that we hadn't been properly documenting our home office deduction for his business, and showed exactly how to fix it which will save us around $1,800 this year alone. It also explained exactly which business expenses could legitimately go on the S-corp return versus our personal return. I'm still using an accountant for the final review, but using taxr.ai first means I'm paying for much less of their time since most of the work is already done correctly. Definitely recommend for anyone in a similar situation.

You've got great advice already, but I want to mention something that saved me HOURS of frustration when dealing with an issue on my husband's S-corp return last year. After trying for DAYS to get through to the IRS business tax line (kept getting disconnected or waiting for hours), I found this service called Claimyr (https://claimyr.com) that actually got me connected to a real IRS agent in about 15 minutes. Check out their demo video: https://youtu.be/_kiP6q8DX5c They basically navigate the phone system for you and wait on hold, then call you when an actual human at the IRS is on the line. I had a specific question about how to report some unusual business expenses on the S-corp return, and being able to talk to an actual IRS agent directly saved me from making what would have been a costly mistake.

I need to publicly admit I was wrong about Claimyr. After posting that skeptical comment, I decided to try it since I was desperate to resolve an issue with my business taxes before the filing deadline. It actually worked exactly as advertised. I got connected to an IRS business tax specialist in about 25 minutes (after spending 3 days trying unsuccessfully on my own). The agent helped me understand exactly how to handle a complicated situation with contractor payments on my S-corp return. What impressed me most was that I got confirmation texts throughout the process, so I knew exactly what was happening. When they finally connected me, the IRS agent was already briefed on my basic question, which saved even more time. For anyone dealing with business tax questions that need official IRS clarification, this service is legitimately worth it.

One thing nobody has mentioned yet is that if you're doing S-corp returns yourself, you need to be SUPER careful about reasonable compensation rules. The IRS scrutinizes S-corps closely because people try to avoid payroll taxes by taking distributions instead of salary. Make sure your husband is taking a reasonable salary from each S-corp based on what would be paid for similar services in your area. Too little salary with large distributions is a major audit flag. I learned this the hard way and ended up owing back taxes plus penalties.

Has anyone used both TurboTax Business and H&R Block Premium & Business for S-corps? Trying to decide which one to go with this year. I've been using TurboTax for personal returns but not sure if it's the best for S-corps.

This is such a timely question for me! My wife and I are in almost the exact same situation - she started an S-corp last year and we've always filed jointly for our personal taxes. One thing I learned that might help you is to make sure you're keeping really good records throughout the year, not just at tax time. We started using QuickBooks to track all the business expenses and income monthly, which made preparing the S-corp returns much easier. It also automatically categorizes a lot of transactions, so you're not scrambling to figure out what each expense was for when you're doing your taxes. Also, don't forget about quarterly estimated tax payments for the S-corp income! Since it flows through to your personal return, you might need to adjust your withholdings or make quarterly payments to avoid underpayment penalties. We got hit with that our first year because we didn't realize the business income would push us into a higher tax bracket. The reasonable compensation issue that Ravi mentioned is super important too. We ended up consulting with a CPA just for that piece to make sure we got it right, even though we did the actual tax prep ourselves.