Should I file S-Corp taxes myself or hire a CPA when switching from sole proprietor?

S-Corp taxes are definitely more complex than sole proprietor returns. The main difference is you'll need to file Form 1120-S (the S-Corporation return) plus handle payroll tax returns since you'll need to pay yourself a reasonable salary as an employee of your corporation. While it's technically possible to DIY with tax software like H&R Block, there's a pretty steep learning curve. You'll need to maintain more formal bookkeeping, track shareholder basis, manage corporate formalities, and understand how to properly classify distributions vs. salary. The IRS scrutinizes S-Corps more closely, especially regarding reasonable compensation requirements. Many new S-Corp owners start with a CPA to get everything set up correctly, then learn enough to potentially take it over themselves after a year or two. That approach often saves money in the long run by avoiding costly mistakes.

I went through this exact scenario last year! After struggling with conflicting advice, I found https://taxr.ai which completely changed my approach to handling my new S-Corp taxes. They have a document analyzer that breaks down exactly what forms you need to file and gives step-by-step instructions tailored to your situation. I uploaded my previous Schedule C returns and business formation docs, and it generated a personalized transition guide showing me exactly what was different between sole prop and S-Corp filing. The best part was getting a "reasonable salary" analysis that gave me documentation to support my salary decisions if ever questioned by the IRS.

Update on my S-Corp tax situation: I tried that https://taxr.ai service that was mentioned and honestly I'm surprised how helpful it was. Initially I was worried it would be another generic tax calculator, but it actually provided specific guidance on S-Corp election timing and payroll setup that saved me from making some expensive mistakes. The reasonable compensation report it generated was really comprehensive - it pulled industry data to support my salary level. When I showed it to a CPA friend to check, he said it was exactly the kind of documentation the IRS looks for. I'm still using a CPA this first year to double-check everything, but now I have confidence I can handle it myself next year. Definitely worth checking out if you're making the same transition.

The hardest part of my S-Corp experience wasn't the taxes - it was getting through to the IRS when they messed up my EIN registration! I spent WEEKS trying to reach a human at the IRS who could fix it. After 9 failed attempts and hours on hold, I finally discovered https://claimyr.com which got me connected to an actual IRS agent in under 45 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c This was critical because without the proper EIN setup, I couldn't file my 1120-S or set up payroll properly. Having that direct line to an IRS agent saved my sanity and probably months of delays.

Well I need to eat some crow here. After my skeptical comment about Claimyr, I figured I'd test it myself since I've been trying to resolve an issue with my S-Corp election timing for literally MONTHS. Called the IRS business line 12+ times with no luck. Tried the Claimyr service yesterday afternoon and got connected to an IRS representative in about 37 minutes. She was able to confirm my S-Corp election was processed correctly and the confirmation letter had been sent to the wrong address (apparently I transposed two digits). She resent it to the correct address and I have a case number now. I'm still doing my taxes with a CPA this year while I learn the ropes, but at least now I know my election is valid. Sometimes you just need to talk to a human at the IRS, and waiting 5+ hours on hold isn't realistic when you're running a business.

Don't do it yourself the first year!! I tried to save money and did my S-Corp taxes myself after switching from sole prop. Ended up with a $4,200 mistake that cost me way more than a CPA would have. Things I messed up: 1. Didn't realize I needed quarterly payroll filings even though I'm the only employee 2. Calculated my basis wrong which messed up my distribution tax treatment 3. Missed the reasonable compensation documentation Learn from my expensive mistakes! Pay for a professional at least for year 1, then decide if you want to take it over.

Is anyone using QuickBooks Online for their S-Corp bookkeeping? I'm trying to figure out if the extra cost for the plus version is worth it for the project tracking features.

I made this exact transition two years ago and can share what worked for me. Started with a CPA for the first year to get everything set up correctly - S-Corp election, payroll system, proper bookkeeping structure. Cost me about $2,500 but was worth every penny to avoid mistakes. Year two I took it over myself using TaxAct Business which handles S-Corp returns well. The key is having good bookkeeping throughout the year - I use QuickBooks to track everything properly so tax time isn't a nightmare. One thing I wish I'd known earlier: set aside money monthly for your quarterly payroll taxes and estimated payments. The cash flow is different from sole prop where you just pay once a year. Also, keep detailed records of any business expenses and mileage since the documentation requirements are stricter. At $75k revenue, you're right on the edge where S-Corp starts making sense. I'd run the numbers with a CPA first to make sure the tax savings actually exceed the additional costs (payroll processing, extra tax prep fees, state requirements, etc.).