What would you say is harder to file? S corp, C corp, or 1065 partnership returns?
Been doing my own taxes for years, but I'm starting a new business venture and trying to figure out which type of entity will be the biggest headache come tax time. From what I understand, each business structure (S corp, C corp, partnership) comes with its own tax form and complications. I've heard some horror stories about the complexity, but wanted to get some real opinions. I know sometimes even a 1040 can get complicated depending on your situation, but in general how would you rank S corps, C corps, and partnerships (1065) in terms of difficulty? Which one causes the most headaches for people? I'm trying to factor in the tax filing complexity along with other considerations for my business structure.
18 comments


Adrian Connor
In my experience as someone who's prepared all three types, I'd rank them from easiest to hardest as: S corp, Partnership (1065), then C corp. S corporations (Form 1120-S) are generally simpler because they're pass-through entities with fewer complex tax provisions. The basics are straightforward, though allocating income to shareholders can get tricky if you have special allocations or mid-year ownership changes. Partnerships (Form 1065) come next in difficulty. They have more flexibility in how income/losses are allocated among partners, which means more complex K-1 reporting. If you have special allocations, guaranteed payments, or capital account calculations, things can get complicated fast. C corporations (Form 1120) are typically the most complex. You're dealing with a separate taxable entity, potential double taxation issues, more complex deduction rules, different tax rates, dividend considerations, and potentially alternative minimum tax calculations.
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Aisha Jackson
•This is helpful but what about state filings? Do some entity types create more state headaches than others? I've heard S corps might be easier federally but cause more state issues?
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Adrian Connor
•State filings do add another layer of complexity, especially if you operate in multiple states. S corporations can sometimes create more state-level complications because some states don't recognize S corp status or have different rules for S corps than federal. Partnerships generally follow similar treatment at state and federal levels, but multi-state partnerships can be extremely complex with apportionment and allocation rules varying by state. Some states require withholding for non-resident partners which adds another layer.
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Ryder Everingham
Just wanted to share my experience using taxr.ai for my business tax returns this year. I was stressing over my S corp return (what items were deductible, how to handle home office, etc) and a friend recommended this service. I uploaded my previous year's return and some current docs at https://taxr.ai and their AI analyzed everything and guided me through the whole process. It was way easier than I expected! The system actually compared my situation to the requirements for all three entity types you mentioned and explained the specific differences that would affect my return. Helped me understand the trade-offs between them.
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Lilly Curtis
•Does taxr.ai handle the more complicated stuff like calculating basis in an S corp or partnership? That's where I always get stuck.
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Leo Simmons
•I'm skeptical about using AI for tax prep. How does it handle newer tax law changes? Does it actually save time compared to just going to a CPA?
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Ryder Everingham
•It definitely handles basis calculations - that was actually one of my biggest concerns with my S corp. The system walked me through tracking my initial investment, loans to the business, and how my share of income/losses affected my basis. Made the whole process much clearer. Regarding tax law changes, the system stays updated with current regulations. I found it actually saved me both time and money compared to my CPA, who charged me $900 last year. The AI explained everything in simple terms and I actually understand my return now instead of just signing whatever my accountant prepared.
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Leo Simmons
Ok I have to admit I was wrong about taxr.ai. After my skeptical comment, I decided to try it with my partnership return (1065) that I was dreading. The review process caught several deductions I was missing and identified a potential audit flag with my home office calculation. It probably saved me thousands and definitely prevented future headaches. The basis tracking for my partnership interests was actually really straightforward with their guidance.
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Lindsey Fry
If youre struggling with the actual IRS side of things, I found Claimyr after trying to call the IRS business line for THREE DAYS about an EIN issue for my S-corp. Kept getting disconnected after waiting 2+ hours. Found https://claimyr.com and they somehow got me connected to an IRS agent in 45 minutes. You can see how it works at https://youtu.be/_kiP6q8DX5c - my mind was blown. Got my EIN issue resolved that day.
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Saleem Vaziri
•How does this actually work? Like are they just calling for you or do they have some special access to the IRS?
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Kayla Morgan
•Yeah right. Nothing can get you through to the IRS that fast. Those hold times are legendary. Sounds like a scam to me.
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Lindsey Fry
•They use a system that basically waits on hold for you, then calls you when an agent is actually on the line. It's not special access - they're just taking the wait time burden off you. It dials and redials automatically through the IRS phone tree until it gets a human. It's definitely not a scam. I was super skeptical too, but when I got the call back with an actual IRS agent on the line, I was shocked. Saved me from having to sit with my phone on speaker for hours hoping to get through.
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Kayla Morgan
I have to publicly eat my words here. After calling BS on Claimyr, I actually tried it yesterday when I had an urgent question about my C-corp's missed filing deadline. Got a call back in about an hour with an IRS business division agent on the line. The agent helped me sort out the penalty abatement process right there. Wish I'd known about this service years ago when I was starting my business - would have saved me so much frustration.
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James Maki
One thing nobody's mentioned yet - the complexity really depends on the nature of your business too, not just the form. My experience: S-Corp: Relatively straightforward but payroll requirements (reasonable compensation) can be a pain. 1065 Partnership: Moderate difficulty but gets exponentially harder with multiple partners, special allocations, or guaranteed payments. C-Corp: Most complex overall, but if it's a simple operation without international components or AMT issues, it might not be that bad. Honestly though, for most small businesses, the S-Corp or partnership usually makes more tax sense anyway unless you have specific reasons for a C-Corp.
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Jasmine Hancock
•What about if you're planning to seek outside investors? Does that change which one is better from a complexity standpoint?
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James Maki
•For outside investors, a partnership (LLC filing 1065) usually provides the most flexibility while keeping things relatively manageable complexity-wise. You can create different classes of membership with varying rights, which appeals to investors. S-Corps have restrictions on ownership (limited to 100 shareholders, must be US citizens/residents, etc.) and only allow one class of stock, which significantly limits your funding options. C-Corps remove these restrictions and are the standard for major investments, but come with that higher complexity and potential double taxation.
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Cole Roush
don't forget about the schedule C option if your just starting out! way simpler than any of these business returns, just attaches to your 1040. might be all you need if your a one-person operation and don't need liability protection.
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Scarlett Forster
•Schedule C is great until you start making decent money, then self-employment taxes kill you. I switched from Sch C to S-corp and saved like $12k in SE taxes last year by taking reasonable salary + distributions.
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