Converting from S-Corp to Sole Prop

I can't help with the process, but want to say it can be done.  We're going to be doing the opposite.  When we first converted from S-Corp to LLC, our accountant did the transition.  He'll be helping us go back to an S-Corp.  I can't tell you how it was done because I didn't do it myself, but it seemed to be an easy transition the first time.  

@Realtor-27519 

You may consider converting your data to QB Desktop and use the trial version to access your historical data for good. Then you can signup for a new QBO Simple Start to start from scratch.

Managing how your business works and prioritizing the needs of your finances and data is important to company owners like you, Realtor-27519. Let me help you convert from an S-Corporation to a Sole Proprietorship business in QuickBooks Online.

You don't need to open a new QuickBooks file when converting from an S-Corporation to a Sole Proprietorship business entity. You'll have to change the company type within the existing data. Once final tax filings are complete for the year, convert this information on your Accounts and Settings. To do this:

1. Go to Settings ⚙ and click Account and Settings.
2. Under the Company tab, select Edit from the Comp[any Type section.
3. Modify the Tax Form dropdown to Sole Proprietorship.
4. Review all information and click Save. Then, click Done.

Additionally, once your S-Corp files its final payroll tax returns for the year, you can cancel your QBO Payroll Subscription. After your file has been converted, run your residual business income or expenses through the sole proprietorship and make sure to close out all S-Corp-related accounts like shareholder distributions, payroll, etc, and only use your sole proprietor equity or draw accounts from there. Also, we recommend consulting your accounting professional for additional guidance when handling your company data.

In case you need to forecast the money in and out of your business, here's how to use the cash flow planner in your account and run specific reports to review your accounting data.

Let me know in the comments below for any added queries when changing your business entity. I'll be looking forward to your response to assist you further. Keep safe, and have a good one!

Thank you.  This is the information I was looking for.

You're always welcome, Realtor-27519.

We're glad to know my colleague FateCandylaneT helped you by answering your concerns about converting from S-Corp to Sole Prop. It's our pleasure to address any questions you may have to ensure you get the most out of QuickBooks.

Feel free to get back in this thread if you have any other QuickBooks queries. We'll be here to answer them for you. Stay safe.

When converting, is there an effective date to enter? If I wait til the tax return is filed for the S Corp, I wont be converting to Sole Prop til Feb/mar? Thanks for help, I appreciate it!

Hi there, @Cmassier, and Welcome to the Community.

When converting from an S-Corp to a Sole proprietorship, the effective date of the conversion is an important consideration. The effective date can impact the tax filing requirements and the transition between the two business structures. With this, I recommend reaching out to your Accountant, as it's essential to engage a qualified tax professional to evaluate your specific business situation and provide guidance on the effective date of the conversion and the associated tax implications. I also recommend contacting the IRS contact support.

I've also added this article to guide your future work: Change your business name, contact info, or EIN in QuickBooks Online.

Please don't hesitate to reply if there are any additional questions concerning converting from S-Corp to Sole Prop. Keep Safe!

@Cmassier 

You should signup for a new account for the new company file. Once you complete your S Corp filing, convert your data to the QB Desktop file format and you can use the trial version to access your historical data for good before canceling your old QBO account.

Please confirm that I would be able to access my old S-corp records, once I file my final 2023 taxes and convert to a Sole Proprietorship, so I have the files for future reference.  I am seeing conflicting advice.

Hi there, Realtor-27519
 

I'm here to clarify and assure you that I will give you the exact information about the S-corp into the sole proprietorship.

When you're changing your EIN because of the new company structure, it requires you to sign up for a new subscription. Take note that your existing company won't be canceled automatically once you cancel it, you can still have access. Thus, you will have two active subscriptions. After you're finished with the tasks in your old S-corp company, you can cancel your old subscription. However, you can still have the access to view it for one year.

Additionally, you can check this guide to learn more about the new feature in QuickBooks: What's new in QuickBooks.
 

If you have additional questions about S-corp you can always click the Reply button, I'll be around to lend a hand. Stay safe!