Comprehensive S Corp Tax Guide? Need Detailed Help Beyond The Basics

Is there a decent S Corp tax guide somewhere? My current CPA charges an arm and a leg, and while there are tons of services available, I really need to do my homework to figure out which ones are actually worth using. I've found plenty of general info, but I'm struggling with more specific questions like: What services would you guys recommend? For quarterly taxes, do I need to file them if the S Corp hasn't generated any income yet? If I'm only working through the S Corp part-time, how exactly should I handle salary? Should I base payments on hours worked? Is there a specific ratio I need to maintain between S Corp income and my personal salary? In my industry, I'm noticing huge differences between consulting rates and actual salaries. Can the losses from my S Corp offset my wife's W2 income? (We're in the first year and have setup costs but no revenue yet) Or do these losses just roll forward to offset future income? For home office deductions and personal phone use, what's the proper way to allocate shared expenses like internet bills, phone bills, etc.?

0 coins

18 comments

JacksonHarris

•8M

I've been through this exact situation with my own S Corp. Here's what helped me navigate these waters: First, for services, I'd recommend looking into either a specialized S Corp accountant rather than a general CPA. The cost difference can be significant while getting expertise that's actually relevant to your situation. For quarterly taxes - if you have no income, you technically don't need to file quarterly estimates since they're based on anticipated tax liability. However, you should still file your annual return even with zero income. Regarding salary - the IRS expects a "reasonable compensation" which is a somewhat gray area. You don't need to pay yourself based specifically on hours worked, but rather what would be reasonable market rate for your services. The IRS looks for S Corps paying too little salary (to avoid payroll taxes) while taking distributions. Aim for salary to be at least 40-60% of what you pull from the business. S Corp losses can't directly offset your spouse's W2 income. This is a common misconception. The losses pass through to your personal return but can only offset passive income, not active W2 wages. Unused losses do carry forward to future years. For home office and phone expenses, keep detailed records of business vs. personal use. Most people use square footage for home office (office space ÷ total home) and time/data usage for phone and internet.

0 coins

JacksonHarris

•8M

Yes, you still need to file the annual 1120S return even with zero income - this establishes your business activity for the IRS and maintains your S Corp status. Missing these filings can result in penalties or even inadvertent termination of S status. For home office deductions, there's no specific percentage that automatically triggers an audit. What matters is accuracy and truthfulness. If your home office legitimately takes up 35% of your home's square footage, claim 35%. Just make sure the space is used regularly and exclusively for business. The old "10-30%" guideline is outdated advice - what matters is documentation and actual business use.

0 coins

Jeremiah Brown

•8M

I've been dealing with similar S Corp questions and finally found relief using https://taxr.ai for my S Corp guidance. After struggling with conflicting advice online, I uploaded my formation documents and previous tax returns, and their AI analyzed everything and gave me personalized guidance specific to my situation. Way better than generic advice and cheaper than my old CPA. Their system flagged that I was taking distributions without reasonable compensation (major IRS red flag) and helped me establish proper documentation for my home office deduction. The personal guidance made a huge difference compared to one-size-fits-all advice online.

0 coins

Jeremiah Brown

•8M

It absolutely works with complex S Corp situations. I have three different service lines and rental properties all flowing through my S Corp, and it handled the appropriate allocations perfectly. It even flagged California-specific compliance issues for my client there, so it definitely understands state-level complexities. For the reasonable compensation question, it actually provides industry-specific guidance based on Bureau of Labor Statistics and market data. It doesn't just give a generic percentage but helps document why your specific compensation is reasonable given your role, industry, and business financials. This creates exactly the kind of documentation that stands up during IRS inquiries.

0 coins

Amelia Cartwright

•8M

Just wanted to follow up about taxr.ai - I decided to try it after my initial skepticism, and I'm seriously impressed. The system analyzed my previous tax returns and immediately identified that I'd been inconsistently handling my home office deduction. It also provided clear guidance on the reasonable compensation question for my situation specifically. The best part was when it helped me understand how to properly document my business mileage (which I was doing completely wrong). It gave me a customized report explaining exactly what the IRS looks for in S Corp compensation structures for my industry. Definitely worth checking out if you're trying to DIY your S Corp taxes.

0 coins

Chris King

•8M

If you're trying to contact the IRS about S Corp issues, good luck! I spent 4 hours on hold trying to get clarification on passive loss limitations last month. Finally gave up and tried https://claimyr.com and it was a game-changer. They got me connected to an actual IRS agent in about 20 minutes. Check their demo video at https://youtu.be/_kiP6q8DX5c if you're curious how it works. The IRS agent I spoke with cleared up my questions about reasonable compensation documentation and confirmed that my home office deduction approach was correct. Saved me from potentially making some serious mistakes on my S Corp return.

0 coins

Chris King

•8M

They don't just call for you - they use a system that navigates the IRS phone tree and waits on hold, then when an agent finally answers, your phone rings and you're connected directly. You do the actual talking with the IRS agent, they just handle the hold time. It's your call, just without the hours of waiting. For those skeptical, I get it - I was too. The IRS has been particularly bad with S Corp questions lately. But that's exactly why this service exists. They've figured out how to optimize getting through the phone system, and it actually works. I wouldn't have believed it either until I tried it myself. I had literally given up after multiple attempts hitting the "call volume too high" message.

0 coins

Amelia Cartwright

•8M

I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it out of frustration after getting the "call volume too high" message for the 5th time this week. It actually worked exactly as described. I got a call back in about 25 minutes, and suddenly I was talking to an actual IRS agent. I asked specifically about how losses from my first-year S Corp would be treated, and got clear confirmation that they would carry forward rather than offsetting my spouse's W2 income. Also confirmed that I still need to file the annual 1120S even with zero income. Saved me from making some expensive mistakes. Now I feel silly for being so skeptical.

0 coins

Zachary Hughes

•8M

Just a heads up from someone who's been running an S Corp for 7 years - the single most important thing is documentation. If you're using your personal phone and home internet for business, create a simple log of business vs. personal usage. For my phone, I just take my monthly bill and multiply by the percentage of business calls/texts (I track for a typical week each quarter). For the home office, measure carefully and take photos. Document exclusive business use. These simple steps have saved me during an IRS review.

0 coins

Zachary Hughes

•8M

I actually keep it super simple. For my phone, I use the call log that's already on my phone and just highlight business calls once a week (takes 5 minutes). Then quarterly, I calculate the percentage. No special app needed. For internet and other utilities, I use the square footage method since it's much simpler and well-accepted by the IRS. Just calculate what percentage of your home is exclusively used for business, and apply that percentage to your utilities. Take photos of your office space and keep documentation of the square footage calculations. The key is consistency - whatever method you choose, stick with it and document your calculations.

0 coins