S Corporation Tax basis, wages, and K-1s.
For S corporation owners who want accurate returns and a clear record of their basis year after year.
S corporation tax work goes beyond filing Form 1120-S. TreeStar prepares the return, issues shareholder K-1s, and maintains shareholder basis schedules so distributions, losses, and loans are tracked consistently over time. We also discuss reasonable compensation, the concept that shareholder-employees who work in the business are generally expected to receive wages that reflect their role before taking distributions. Because we work from your books and can coordinate with payroll, the return, the K-1s, and the owner's individual filing tell the same story.
How we help
Federal S corporation return and related state filings prepared from reconciled books.
K-1s issued promptly so owners can complete their individual returns.
Stock and debt basis schedules maintained across years to support distributions and losses.
Owner wages reviewed in light of role and duties, coordinated with payroll.
Shareholder distributions and loans reviewed for consistent treatment.
Every engagement starts with a written scope, so you know exactly what we will handle for you before any work begins.
How it works
- 01 Reconcile
We tie the books to the trial balance and review shareholder accounts.
- 02 Update basis
We roll forward each shareholder's basis for the year's activity.
- 03 Prepare
We prepare Form 1120-S, state returns, and K-1s.
- 04 Review
We walk through results and discuss owner wages for the coming year.
What you can expect
Basis records that hold up over time
K-1s that match the books and the return
Owner wages reviewed with payroll in mind
Common questions
What is reasonable compensation?
It is the concept that shareholder-employees who provide services to their S corporation are generally expected to receive wages reflecting their role. What is reasonable depends on the facts.
Why does shareholder basis matter?
Basis generally affects whether distributions are taxable and whether losses can be deducted. Tracking it each year avoids reconstructing it later under pressure.