If you produce goods to sell or purchase goods to resale, you will have inventory. Therefore, we need to have your inventory accounted for at the end of December.
How to complete form 1125-A Cost of goods Sold?
You would complete Form 1125-A cost of goods sold information including
Cost of inventory at the beginning of the year
Cost of Purchases or raw materials during the year
Cost of goods sold
Cost of inventory at the end of the year
How do you treat goods taken out of inventory for personal use?
If you are an LLC or S corporation, you would show the cost of goods pulled out of inventory for personal use on Schedule K line— as distribution to partners and on Schedule K-1 as well for the partners that used them. Reduce purchases by the cost of goods used by shareholders.
Read instructions at the bottom of form 1125-A for details needed to understand the entry lines.
How to complete IRS Form 1120S?
If you have an S corporation or LLC taxed as an S Corporation, you would file IRS Form 1120S for your business.
Line 1a is all your revenues (sale of goods and or services)
Line 1b: returns and refunds
Line 2: Cost of goods sold from line 8 of Form 1125-A
Submit Form 1125-A with your Form 1120S
Line 6: Total income (loss)
How to complete Form 1120S page 1: Deductions?
Do you need to Complete Form 1125-E Compensation of Officers?
If you are an S corporation and file Form 1120S, you would need to complete Form 1125-E if you pay compensation to your officers and your total revenues for the year is $500,000 or more.
Check page 1 of Instructions for form 1125-E Total Receipts to determine the income to factor in the calculation of total receipts.
If you are not required to complete Form 1125-E, you don’t need to attach it either to form 1120S.
Line 7: enter the amount paid to officers as salaries or compensations
Line 8: enter the amount paid to your staff members that are not officers
Changes are a partner or shareholder that works in the business would be an officer. Therefore, the salary would be on line 7.
If you make distribution to your partners that work in the business, these distributions must be treated as salaries or wages for the service they performed in the business up to a certain point that is presumed reasonable amount for the work they performed, before you can treat the remaining distribution as distribution that is not wages and not subject to social security and Medicare Tax.
If it is you the only owner of the business or the only one that works in the business, you could use “Federal Tax Withheld Record Spreadsheet” to track and record your compensation during the year to make your tax completion easier.
Line 12: Taxes and Licenses: See instructions for form 1120S for detail
Line 13: Interest: See instructions for form 1120S for more detail.
Line 14 Depreciation. Do not include Section 179 on this line. It would go on Schedule K and Schedule K-1.
If you placed assets in service during the tax year you are filing for, and would depreciate them, you need to complete Form 4562 Depreciation and Amortization.
Depreciation Spreadsheet-DSS22821:
https://liberdownload.com/downloads/depreciation-summary-spreadsheet-dss22821/
The video is an example of how to complete IRS Form 1120S
Schedule K
Schedule B Form 1120S: Answer the question on schedule B.
Complete Schedule K Form 1120S with the profit or loss from page 1. If you have rental properties, you would enter the profit or loss on Schedule K. Interest income and royalties income would go on schedule K.
Interest expenses and royalties’ expenses would go on schedule K under deductions section.
The video illustrates how to complete Schedule K (Form 1120S).
Schedule K-1
Complete Schedule K-1 (form 1120S) after you completed Form 1120S.
The total schedules K-1 should equal schedule K.
Every line on schedule K would have a corresponding box on schedule K-1. Read IRS Instructions for Form 1120S for every line on schedule K you have entered a number, to see how you should report it on schedule k-1.
How to complete 2021 IRS Form 1120S and Schedule K-1 For your LLC taxed as an S Corporation
Disclaimer:
“I am not an attorney to practice law. I am not allowed to draft legal documents, give advice on legal matters including immigration, or charge a fee for these activities.” Our articles are informative and based on our knowledge and experience. They are for educational purpose only. Use them at your own discretion.
Affiliate Links Disclaimer:
Our articles contain affiliate links. When you click on one of our affiliate links and make a purchase, we will receive a commission. We thank you very much for your support!
Please Find About our Products and Links Below
Free Download
Would you please check the “Free Download” section on our website for budget spreadsheet, budget planner PDF, tax forms, motivational quotes, checklists, and more for you do download. You don’t need to subscribe to access them. We would like to have you in our community where we interact and encourage each other to reach our goals. We invite you to join our email list, but it is not required to download from Free downloads.
https://ninasoap.com/free-downloads/
Our Objectives
At Nina’s Soap (Liberman Consulting L.L.C.), you would find information to live a quality life within budget and increase your net worth. Topics covered include personal finance, investment, business management, cooking from scratch and growing some vegetables and fruit to save money and eat healthy.
For more, would you please check our blog:
Contact Information: care@ninasoap.com
You Tube Channel:
Are you a visual type person? We got you covered! You can watch video contents including how to file your business tax returns yourself at:
https://www.youtube.com/c/LibermanConsultingLLC
Liberman Consulting L.L.C. Podcast:
Do you like to listen to podcast while you are busy working to maximize your time and learn at the same time? You can listen to contents including how to save money and create multiple sources of income at:
https://www.buzzsprout.com/1585738/
Join Us for Free
You are invited to join us where you could ask questions, stay motivated and work toward reaching your financial goals.
How to Find Previous Articles
To make it easy to navigate our website, would you please check the side bar? Under “Post Archives”, are our “categories”. The links to our prior articles are saved under their appropriate categories. Would you please click on any category under “Post Archives” to read the titles of previous articles and click on the link of your interest to open the article.
Welcome to Our Financial Success Group!
To learn more tips on how to live below your income without sacrificing the quality of your life and start building wealth, would you please join our community for FREE by subscribing here:
https://ninasoap.com/membership-join/
Our Online Stores
Welcome to Nina’s Soap our Natural Products Store
Our Online Stores
Welcome to Nina’s Soap our Natural Products Store
Natural soaps are handmade with quality grade natural unrefined oils and butters, food grade sodium hydroxide, and herbs grown in our garden without pesticide or chemical fertilizer—- no additives, no fragrance, no dye.
Towels, washcloths, and cloth napkins are natural and eco-friendly alternatives of paper towels, paper napkins, and tissue papers for you to enjoy in the comfort of your home while saving money and the environment.
Best Seller: Nina’s Soap Flour Sack Individual Hand Towel – Set of 5: Small size cloth napkins to use as individual hand towels in the bathroom instead of paper towels or as napkin in the kitchen for family dinners:
https://ninassoap.com/product/ninas-soap-flour-sack-hand-towel-set-of-5/
Welcome to Liber Label our Apparel Store
Customs design clothing, home décor, accessories, and stationery with motivational quotes to lift your mood every day.
Business planner inserts, business tax checklist, to do list, many printable of our digital downloads can be purchased here and shipped directly to your door.
Welcome to LiberOutlet.com our Resale Store
New and used office supplies, toys, small kitchen appliances, household products, packaging supplies at a bargain price.
Welcome to Liberdownload.com, Digital Products Store
Budget and Monthly Expense Tracker, Checklist to create your online store, Inventory and Sales Excel Template…tools you need to manage your money, start and run your business successfully, and reach your financial success.
If you are a Sole Proprietor, a Limited Liability Company (LLC), an S Corporation, or an LLC taxed as an S Corporation, articles and videos on our channel would be helpful to file your business tax returns. If you need more help and would like to meet with us, would you check if our Group meeting session is the best fit for you.
Business Consulting Session: Virtual Group Meeting for new Business Owners that need help organizing their business income and expenses and be able to file business taxes themselves:
Small Business Group Session-Quarter 1:
https://liberdownload.com/downloads/small-business-group-session-quarter-1/
Small Business Group Session-Quarter 2:
https://liberdownload.com/downloads/small-business-group-session-quarter-2/
Small Business Group Session-Quarter 3:
https://liberdownload.com/downloads/small-business-group-session-quarter-3/
Small Business Group Session-Quarter 4:
https://liberdownload.com/downloads/small-business-group-session-quarter-4/
Affiliate Links:
Bluehost: We host our websites at Bluehost and like their service. They take the time over the phone to help solve website issues
https://www.bluehost.com/track/ninasoap/
Please Register for Free
Leave a Comment