We Prepare Tax Returns!

We prepare most type of tax returns:

Individual. 

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

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Client Testimonials

I had a 1099-C for about $135,000. My husband didn't have any withholding on Social Security. His employer couldn't withhold due to incompetence. I felt utter dread wash over me. Memories of owing the IRS before were constantly on my mind. I called a local CPA. Besides being clueless, he wanted to charge me for every question I had about insolvency. I looked on line and found little hope of the countless stories of permanently disabled people like myself getting their student loans forgiven only to be asked to pay taxes on it as if it were income.
Somewhere, somehow, I find an article by Gary Bode. I bookmarked it for when it's time to do the actual taxes. With his excellent help in how to do all of this out of a virtual office I get my part of the work done. My questions got answered, for free. I give a retainer, do what I said I did and wait. I hear from Gary. I go into shock! How can this be? Not only do I not owe on the 135,000....Gary itemizes and after paying what was almost nothing in taxes we get $950.00 back! No more hubby doing the taxes online! I will use Gary Bode as long as he will agree to work with me!
It was so easy, no worries, but professional and top notch. I know I have thanked you Gary but I am so grateful. Thank you ever so much again!

Carla Bray

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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Form 1120-S CPA discusses S Corporation Loans to and from Shareholders | Form 1120-S, U.S. Income Tax Return for an S Corporation

Form 1120-S CPA. S Corporation CPA. U.S. Income Tax Return for an S Corporation.

I run our CPA firm as an S Corporation. So you know I stay current on S Corporation issues. For a free consult call (910) 399-2705. We can provide service regardless of where the S Corporation is registered or where the Shareholders live.

When Form 1120-S CPAs see problems with S Corporation accounting it usually involves the Balance Sheet. Which is understandable. Most S Corporations are small enough that the managing shareholder can track financial transactions by memory. And without some training, the Balance Sheet isn’t as useful for managerial purposes as the Income Statement. But brilliant minds have crafted managerial tools using components of the Financial Statements. I’ve always thought it’s a shame S Corporations lose out on that opportunity.

The IRS takes an interest in loans between the S Corporation and Shareholders

“I think the IRS worries about the S Corporation loaning money to shareholders that never gets paid back and thus escapes taxation. But in my experience as a Form 1120-S CPA, the Shareholders more often lend money to the S Corporation and never get it back, meaning those funds are double taxed – ouch!”
– Gary Bode, Form 1120-S CPA

Two lines of the balance sheet section of Form 1120-S, U.S. Income Tax Return for an S Corporation, are devoted to such loans. Just because the IRS takes an interest in some S Corporation issue doesn’t mean it’s taboo. And that’s the case with S Corporation loans to and from Shareholders. When I prepare Form 1120-S I like to document the loan figures on page four. I think as long as good records are kept there’s no big deal with such loans. See other suggestions below. But good records aren’t always kept. I don’t know if the IRS audits specifically on shareholder loans but once an audit starts, shareholder loans usually get close inspection.

Corporate Schizophrenia

Your S Corporation is a distinct entity by itself, even though you own it. Many IRS audit parameters look for co-mingling of S Corporation and personal finances. Even I feel strange sometimes when I structure transactions between myself and the Firm. I own 100% of it. I am the S Corporation. But the IRS doesn’t see it that way.

Use formal structure with shareholder loans

Here’s what I’d like to see if I was representing your S Corporation for an IRS Form 1120-S tax audit.

  • Detailed history with documentation for all loan related transactions.
  • An actual loan document between the S Corporation and shareholder. Even though it seems like you’re only passing from one hand to the other.
  • Documentation of the loan in the Corporate minutes.
  • An established interest rate.
  • Formal payments.

If you pay attention to only one aspect of the Form 1120-S, U.S. Income Tax Return for an S Corporation, balance sheet make it loans between the Shareholders and S Corporation.

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