Who this is for
Catch-Up Bookkeeping for S Corporations
An S corporation that is behind has two problems a sole proprietor does not: a return due a month earlier, on March 15, and a return that needs a balance sheet as well as a profit and loss. The second is the one that catches people, because a balance sheet cannot be reconstructed from a bank total.
Why the balance sheet matters here
Form 1120-S asks for a balance sheet, and a bank or buyer will ask for one too. It has to tie: bank balances to statements, loans to lender statements, owner capital and distributions to what actually moved. A catch-up for an S corporation therefore reconciles every account for every month in scope, rather than totting up income and expenses, and that is reflected in how it is quoted.
Owner pay, distributions and the payroll problem
An owner who works in the business is expected to take reasonable compensation through payroll, with the rest as distributions. Files that arrive for cleanup often have the owner paid entirely by transfer, coded as an expense, with no payroll run at all. The cleanup records what happened truthfully: distributions as distributions, and any payroll that was run reconciled to filings. Whether and how to correct the compensation picture for a past year is a question for your tax preparer; the books make it a precise question rather than a vague one.
The March 15 order of work
The year with the return due comes first and is handed to the preparer as soon as it reconciles. If March 15 is not reachable, the extension to September 15 is filed with real numbers behind it, and note that the late-filing penalty for an S corporation runs per shareholder per month, so an extension is cheap and a missed deadline is not.
Shareholder basis and the records nobody kept
Distributions beyond basis have tax consequences, and basis is tracked from the company’s own records of contributions, income and distributions. A catch-up that reconciles equity year by year is what gives the preparer the figures to track it. If prior years were never properly closed, the equity section is rebuilt from the bank and documented, and gaps are listed for the preparer rather than smoothed over.
Send how many years are behind and whether payroll was run for the owner. The reply within a business day says what the deposit would be and whether March 15 is reachable.
S Corporations: common questions
Why is an S-corp catch-up quoted higher than a sole proprietor’s?
The return needs a balance sheet that ties, so every account is reconciled for every month rather than summarised. It is more work and it is the work the return requires.
I paid myself by transfer and never ran payroll. What happens?
The books record what happened. What to do about it for past years is for your tax preparer; from here on, payroll can be set up in any state.
Can the extension be filed before the books are done?
Yes, and it should be, with an estimate from the bank behind it. The per-shareholder late-filing penalty makes a missed March 15 expensive.
What your bookkeeper handles
- QuickBooks Cleanup Services
- Catch-Up Bookkeeping Services
- Bookkeeping Cleanup Services
- Behind on Bookkeeping Before a Tax Deadline
- Multiple Years of Bookkeeping, Rebuilt
- Monthly Bookkeeping After the Cleanup
Also written for Sole Proprietors & Single-Member LLCs, Contractors & Trades, E-commerce Sellers, Restaurants & Food Businesses, Real Estate Agents & Brokers, Medical & Dental Practices and Switching From Another Bookkeeper.
Request a quote for your S corporation
Tell us how far behind the books are and whether there is a date. Your bookkeeper replies within one business day with a plain answer: what it would take, whether the date is reachable, and what the deposit would be. Requests answered within one business day · Calls Mon–Fri, 9am–5pm Eastern Or call (888) 786-6502 if you would rather talk it through first.