What to file as, Corp or Sole?

[MDTURBO]

STATE: MD

I started my business in August 2005. I incorporated as a close-corporation and filed an s-corp election 2553 with the IRS about the same time and stated the election to take effect 1/2006.

Questions
1. Do I have to file a form my corporation for 2005, if so which?
2. If no, should I file my deductions on a 1040-Schedule C?

I was under the impression I would file 2005 as a sole proprietorship, and 2006 as an Scorp...

thanks,

Rob

 

[seniorjudge]

I started my business in August 2005. I incorporated as a close-corporation and filed an s-corp election 2553 with the IRS about the same time and stated the election to take effect 1/2006.

Questions
1. Do I have to file a form my corporation for 2005, if so which?
2. If no, should I file my deductions on a 1040-Schedule C?

I was under the impression I would file 2005 as a sole proprietorship, and 2006 as an Scorp...

thanks,

Rob

Were you an S-Corp in 2005 or a sole proprietorship in 2005?

 

[MDTURBO]

Were you an S-Corp in 2005 or a sole proprietorship in 2005?

I started the business in August 2005, too late to file as an S-Corp for 2005 (March 15th cutoff) but I did file the 2553 back then, for which the directions stated to place the start of the following year if filing late (1/1/2006) which I did.

So I was registered as a close-type corporation in MD in August 05, and the IRS acknowledged S-status for 1/1/2006.

The question is, do I file an 1120S for 2005 (I do not believe so), a 1120 (c-corp) which I hope not for double-tax reasons, or file as a sole proprietor 1040-SchedC which is what I'm not sure about since I was incorporated.

Thanks,
Rob

 

[LdiJ]

You made a mistake when you filed your S-corp election. You should have filed it as beginning for tax year 2005. You have until March 15th, 2006 to make the election for 2005. File a corrected 2553 immediately and then file an 1120S.