A business was incorporated as an S Corporation in 2008.

In 2008 they filed their taxes as an S Corp. The owner is one person who has 4 contractors that work for him. The owner prepared the incorporation documents themselves and made a mistake once they filed the paperwork. The owner really wanted to be just a sole proprietor corporation and not an S Corp for filing purposes.

However in 2009, 2010, 2011, 2012 the owner filed their taxes as sole proprietor instead of an S Corp but never changed the legal status of there company to a sole proprietor.

Does the owner have to have there tax returns amended for 2009, 2010, 2011, and 2012 and file as a S Corporation?

#1;As you can see, an S Corp is a Corporation that becomes an S Corp solely for tax purposes. This passes along the business profit or loss to the shareholders who declare that on their tax return using a Sch K1 of 1120S. I mean as an S-Corp, you have made a choice to be treated as a corporation for legal purposes but pass the income through to yourself and your partners and shareholders (if any) so the income taxes are being paid by the individuals only. That income needs to be accounted for like any other personal income on a 1040 or one of its cousins, the 1040-A or 1040-EZ. But the S-Corp also must file its own tax return, using Form 1120S. If your company has rental income or expenses from real estate transactions you’ll need to include a Form 8825. If your business is a farm or fishing venture, you’ll also need to include Form 4136, and so forth. A corporation must file a tax return, and the penalties for not filing can be substantial even if there is no income to report. Even if you would owe no federal income tax but are still required to file a return.You would be required to file a return for the state where the corporation operates. For example, In CA state, "foreign corporations," those chartered in other states, as well domestic corporations have to pay at least $800 to keep the corporate charter alive.


#2;Correct; You need to complete page one of IRS form 1120s with data from your year-end financial statements. Page one of the 1120s calculates the net profit of the business by subtracting business expenses from business revenues. Line 21 shows the business's income or loss for the year. ALSO you need to complete the schedules on pages two, three and four. The final three pages of the 1120s contain supporting data for the calculations on page one. You need to use the data from sch K-1 of the 1120s to generate K-1s for each shareholder including yurself. K-1s are equivalent to 1099s or W-2s, they tell the IRS who received income during the previous years.You need to use the K-1 form to complete the Sch E of each shareholder. All income shown on sch E is subject to ordinary income tax rates but is not subject to self employment tax or medicare and social security taxes.(So UINLIKE your sole proprietorship return, you do no tneed to file Sch C and Sch SE.) You usually pay FICA taxes, NOT SECA taxes on your salary from S corp on W2.You need to file your 1040. Now you have your sch E completed the income from the sch E can flow to your 1040 tax return to be eligible for deductions and credits. Amendments to the federal returns may affect your state returns. To amend the state returns , you need to complete the amended federal returns, then go to the state returns. You cannot e-file an amended returns. You need to send the returns, along with any schedules that changed, to the address where the original S corp tax returns were filed. You can find the appropriate address on Page 3 of the Instructions for Form 1120s.. For a credit or refund, you must file within 3 years (including extensions) after the date you filed your original returns or within 2 years after the date you paid the taxes, whichever is later. You need to file amended returns on Form 1120s: