You will receive an approval letter from the IRS through the mail. The letter will be sent to the address that you made the election under. The letter is usually received about 3 months after you filed the election. 

Something may be up - you should have your tax practitioner call the IRS for you to check up on the status of the election. You will want to make sure the election goes through before 12/31.

A general rule of thumb is to pay 60% of your total compensation through payroll wages and then 40% as distributions. It's important not to take out excess distributions because you could be subject to a reasonable compensation audit.

I recommend using a payroll company like Gusto or ADP. My personal preference is Gusto. Their fees are low and they will keep you organized and compliant.

Reasonable compensation can be based on a number of factors including your skills and experience, your duties and responsibilities, the time and effort expended in carrying out these duties, the size and complexity of the business, and the compensation paid to other employees in similar positions. We're able to calculate your reasonable salary for your specific business and job title though a survey and industry analysis.

If you have a client who paid you via cash, check, bank transfer, or a personal app (Zelle, Venmo, PayPal friends & family), then your client is right to ask you for a W9. Instead of completing it with your name and social security number (like you did before), you will now complete it and mark that you are an S Corp and include your business name and EIN.

However, most of my clients should not receive 1099s from their clients because they accept payment via a third party processor (Stripe, PayPal goods and services, Wave, Honeybook, Dubsado, etc).

Below is the swipe copy you can share with your client who is making this request. 

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Per our accountant, a 1099-NEC is not required because we were paid via a third party payment network that will issue a 1099-K instead.

Please reference the 1099 instructions, page 3 bottom right that reads “Form 1099-K. Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC. See the separate Instructions for Form 1099-K.”

https://www.irs.gov/pub/irs-pdf/i1099mec.pdf

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Sometimes you will still receive pushback saying they want to file "just in case". I just keep pushing back because you don't file returns you aren't required to file "just in case". Since your income received from a third party processor is reported on a 1099K, if your client also reports it then it is double reported. If you are having trouble, just reach out.

It's important to keep business and personal separate for several reasons.

It's a good practice and would really help you in the event of an audit.

That means you should pay personal expenses from your personal accounts and business expenses from your business account. If cash is tight on either side, transfer between accounts.

If you use PayPal, you should have a separate profile for business and personal. Your business profile should only be linked to business accounts. You can edit this in PayPal under Pay & Get Paid > Banks & Cards > and then delete any accounts that are not business.

If you accidentally pay a personal expense from a business account:

You should classify as owner's draw and it will not count as a business deduction. If this is an autopay item, please correct the billing account.

Fun Fact: estimated tax payments and payments on your personal tax return are actually personal expenses and are not deductible. If you pay them from your business we will treat them as owner's draw.

Long story short: receipts are a client responsibility and used to back yourself up should you ever get audited. We don't manage your receipts and we won't ask you for them. 

Your S Corp return is due on 3/15 every year. If you file an extension, you will have an additional 6 months to file your return (extended due date is 9/15).

Schedule K-1 is an IRS form used by S corporations to declare the income, deductions, and credits that shareholders have received in the tax year. Individual taxpayers transfer the financial information on their K-1s to their individual tax returns. 

Now that you're an S Corp, you still need to make estimated tax payments at the individual level. This means you will login to the IRS website and pay towards your personal account, and not the business account.

This is because an S Corp is a passthrough entity, meaning all business income flows through to your personal return on Form K-1.

You should save 25% or more of your business net income for taxes. We can work together to determine what your estimated taxes should be and when you should file.

What estimated tax payments are: An estimate payment of taxes allows you to avoid penalties and avoid paying in taxes at the end of the year when your money may have been spent already.

How to file your estimated payment: Either online or by mailing a check and a paper voucher.