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danelle81
Level 1

Convert LLC to S Corp in QuickBooks Desktop

Just got IRS acceptance to be taxed as an S Corp from LLC (dated back to 1/1/21). What is the best method to convert QB file?  I have read 2 methods - One to change tax status in current file; second to copy current file to new company file. I am concerned about setting up new company file due to active Assisted Payroll account. Please provide correct method and details. 
Thank you!

2 Comments 2
Rea_M
Moderator

Convert LLC to S Corp in QuickBooks Desktop

I've got the best method for converting your QuickBooks Desktop (QBDT) company file from LLC to S Corp business entity, @danelle81.

 

Since you have an active Assisted Payroll account, it's best to change tax status or report information in your current company file. This will update your tax forms. Then, your payroll and all other transactions will be recorded a usual. To do this, here's how:

  1. Go to the Company menu.
  2. Select My Company.
  3. Click the Pencil icon to edit the information.
  4. Select on Report Information.
  5. Fill in the necessary information.
  6. Click on OK

 

I've attached screenshots below for your reference.

 

 

Once done, you'll have to download and complete the Assisted Entity Change Request Packet when you receive your new Employer Identification Number (EIN) from the IRS. Then, submit it to QuickBooks Desktop Payroll Assisted by fax, mail, or email. For the complete details, I encourage you to check out this article: Entity change process for QuickBooks Desktop Assisted Payroll.

 

Also, here's IRS Publication 1635 to guide you further in changing your EIN: Understanding Your EIN.

 

Stay in touch with me if there's anything else you need in converting your QBDT file. Drop your comment below, and I'll be right here to help. Take care.

danelle81
Level 1

Convert LLC to S Corp in QuickBooks Desktop

Thank you for the response, but there is no need to change my FEIN (per the IRS letter).  I understand how to update the company file for tax filing purposes from LLC-1040 to S-Corp-1120, but do I have to do JE's to reclassify current y-t-d draws to distributions within the equity accounts?

 

Thanks!

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