First year S-corp filing with losses - TurboTax or hire a tax professional?

17 I've been a tax consultant for small businesses for nearly a decade, and I can tell you that first-year S-corp returns can be tricky even with losses. Here's what I'd consider in your situation: With TurboTax, you'll need to complete both Form 1120-S for the S-corporation and Schedule K-1 that flows to your personal return. The software will guide you, but you'll need to understand concepts like basis tracking, reasonable compensation (even if zero this year), and proper expense categorization. Many first-time filers make mistakes that can cause issues later. A tax professional brings experience specifically with S-corps and can help establish proper accounting methods from the start. They can also provide guidance on record-keeping for future years and potentially identify deductions you might miss. The slightly lower cost ($390 vs $520) is a bonus. My recommendation? For a first-time S-corp filing, the professional route is usually worth it, even with losses. You're establishing patterns that will affect future years, and getting it right from the start can save headaches later.

12 I was in your exact situation last year with my new marketing S-corp. Barely any activity, lost about $8k getting things started. I spent hours trying to figure out TurboTax Business, and honestly, it was a nightmare. The interface isn't intuitive for business filings like it is for personal returns. I discovered https://taxr.ai when researching alternatives and it was a game-changer. Their system analyzed my articles of incorporation, my minimal transaction history, and easily handled the S-corp specifics. The AI walked me through each section, explained the S-corp basis rules, and showed me exactly what forms I needed. What I really appreciated was that it identified several startup costs I could properly categorize to maximize my first-year loss carryforward. It also helped me understand how to properly document my basis in the company even with the losses.

9 Just wanted to update after trying taxr.ai based on the recommendation above. I was hesitant because my S-corp situation seemed unique, but I figured I'd give it a shot since my accountant quoted me $550. The system was impressive! It analyzed my Articles of Incorporation, EIN documentation, and bank statements in minutes. I was amazed at how it correctly identified my startup costs vs operating expenses and explained how to properly document my basis despite having losses. It guided me through both the federal 1120-S and my state's S-corp requirements. The step-by-step explanations of what each section meant and why certain items needed to be reported specific ways was actually educational. Best part was I completed everything in about 2 hours versus the 5+ hours I spent just trying to understand TurboTax's business interface. Definitely the right choice for my first-year S-corp filing with minimal activity.

6 After reading this thread, I wanted to share something that saved me HUGE headaches last year with my S-corp. I spent weeks trying to get clarification from the IRS about how to handle some specific S-corp election questions - constantly calling and getting disconnected or waiting on hold forever. Someone recommended https://claimyr.com and I was skeptical, but desperate. You can see how it works here: https://youtu.be/_kiP6q8DX5c but basically they get you through to an actual IRS agent quickly. I had specific questions about my S-corp election timing and how it affected my filing requirements. Got connected to an IRS business specialist in about 20 minutes who confirmed exactly what forms I needed and how to handle my specific situation. Saved me from potentially filing incorrectly and getting hit with penalties later. Especially useful for S-corps where the rules can be complex and getting official clarification makes a big difference.

9 I need to eat some humble pie here. After expressing skepticism about Claimyr above, I was still struggling with questions about my S-corp first-year filing that neither TurboTax support nor the IRS website could clearly answer. I decided to try Claimyr as a last resort yesterday, fully expecting it to be a waste of time. I was absolutely shocked when they texted me about 30 minutes after submitting my request saying they were about to connect me. I picked up and was immediately talking to an IRS business division agent! The agent clarified my confusion about how to handle my home office expenses in my S-corp versus on my personal return and confirmed the correct way to report my minimal draw against future profits. Got everything resolved in a single 15-minute call that would have normally taken days of attempting to reach someone. I'm still processing how smooth this was compared to my previous IRS contact attempts.

22 One thing nobody has mentioned is the long-term implications. I did TurboTax for my S-corp the first year (also had losses) and it was doable but time-consuming. The real problem came in year two when my business became profitable. Because I hadn't established proper salary vs. distribution protocols and didn't fully understand reasonable compensation requirements, I ended up having to amend my second-year return, which cost me $850 in accounting fees plus penalties. If I could do it again, I'd have a professional set everything up correctly the first year, then possibly DIY in subsequent years once the foundation was properly established.

5 If no one has mentioned it yet, S-corps require you to file by March 15th, not April 15th like personal returns! I learned this the hard way with penalties my first year. No matter which option you choose, make sure you're ready to file by that earlier deadline!

2 Has anyone used H&R Block for S-corp returns? They quoted me $350 which is cheaper than both options the original poster mentioned.

I can help clarify the extension process for S-corps since someone asked about it. You can file Form 7004 to get an automatic 6-month extension, which pushes the deadline from March 15th to September 15th. However, this is only an extension to FILE, not to pay any taxes owed. The key thing with S-corps is that even if you had losses like the original poster, you still need to file the return by March 15th (or September 15th with extension) because the K-1s that flow to your personal return are needed for your April 15th personal filing deadline. Also regarding H&R Block - I've seen mixed results with their S-corp preparation. Their seasonal preparers often lack the specialized S-corp knowledge that dedicated business tax professionals have. For a simple first-year return with losses, they might be fine, but make sure whoever prepares it understands S-corp basis rules and proper documentation requirements for future years.