[Dan]

This may be a strange question but…

I am helping my in-laws file their tax returns. They have an S-Corp and many other items that are making the filing complicated, but I think I can do it if only I can fill out the forms manually. I have been looking everywhere online for a way to just enter all the information manually. Unfortunately, every e-file program I used tries to do the work for me. Is it possible to get an electronic 1040 form, plug that info in as if I’m doing it by hand, and send it over electronically? I basically don’t want any tax program “helping” me. I just want to fill out the forms myself. Is going the paper option the only way? I’ve been looking everywhere. The program I’m using now is refusing to apply the IL earned income credit and it’s driving me crazy.

Thanks in advance.

[Recked]

There is no program that will allow you to do that.
Perhaps if you have adobe pro you can download the .pdf versions of the forms and manually edit them.

The last tax program that I know of that used forms as the user interface was Tax Relief by Microvision.
They were bought out my Ultra Tax/Creative Solutions/Thompson Reuters back in 2003/2004 ish?
I think we used Tax Relief for one or 2 tax seasons after I started full time after college.
It really was a great program back in the day.

One point on the EIC. Do they have a salary from the S corp or W2's?
You need to have earned income to qualify for EIC and S corp K-1's do not qualify as earned income by default.
If we have a client in this situation we attempt to back door the EIC but more often than not its flagged and reviewed as it doesn't technically count as earned income for the purposes of EIC.

Note: I know nothing about IL taxes or their EIC qualifications.

[Dan]

@Recked

Thanks for the input.

I just have a quick followup: I need to file an 1120S for my in-laws. I am struggling to find an online site that let's me file it electronically. Turbo Tax says it can do it for $150! I'm trying to find better options, but a simple google search isn't giving me any results…Can I just mail a paper copy of the 1120S or is that old school?

[Recked]

Can you is a different question than SHOULD you.
If you are a paid preparer that does more than a certain number of returns the IRS requires you to e-file. I think that number started at 100 returns but is now something like 10.
If this is the only return you are doing as a favor, then I am sure you CAN mail it in on paper.

But as to the SHOULD you. My 2 cents. If you e-file a return it is not processed by hand or reviewed by the processor for potential errors or flags. It does not have a set of eyes looking at each line item as it is processed. When you e-file a return it goes into a big computer system batch, with the computer system using predetermined thresholds and numbers matching to throw any potential flags. I personally would always rather take my chances running through the e-file computer system, vs paper filing and having a return processed by hand. There is also the risk of the processor making an error.

The cost of incurring and then defending against an audit, far outweigh the $150 you will save by not e-filing.
That's my 2 cents from years of experience.

Some items to consider. Are the S-corp officers on payroll as required by law? Is their compensation “fair and reasonable”? What are the potential implications if the person processing the return feels their compensation is NOT fair and reasonable and initiates an audit?

[Dan]

The S-Corp is just my father-in-law. He doesn't have any employees. It's just a side job he does in construction. This is a return I'm doing for him as a favor, no compensation. You make a lot of sense on the electronic file option. I just wish S-Corps were easier! Thanks.

[Adam]

If you paper file your audit risk is about .000000001% in other words you wont get audited, how audit programs work is they run algos through the software to scan for certain possible red flag items, for less severe they send out a notice of inquiry, then for more severe they show up at your door.

A basic S-Corp should not have anything suspicious especially if hes not active in participation. If you can do a schedule C you can do a small S corp, its basically the same input.

The caveat to this is it could end up being a major pain in the ass to file all the forms that are required with the S-Corp that software generates.

The odds of audit are low though either way from the sounds of his income levels.

But like said above $150 for software will be worth its weight in gold when it comes to completing the return without doing math adjusting AAA and the flow throughs.

[Author]

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