Old company entries in new company ledger.

Robin4649 · ‎December 28, 2018

Will my old company file (S Corp) entries automatically go to my new company (LLC) file? I am using Desktop Pro 2018 and Enhanced Payroll. Same company but I changed the entity only.

john-pero · ‎December 28, 2018

It all depends on if you do easy or correct. Easy is maintain same company file as a backup for tax filings and rename company file and edit FEIN and filing status in newly renamed copy.

Correct is start brand new company file for your LLC , from scratch. You have two entirely different companies. An S corp is a C corp first with an election for S statys for pass through taxing. An LLC is a state level pass through for an individual or partnership. You cannot just throw a switch changing from a corporation to an individual.

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john-pero · ‎December 28, 2018

It all depends on if you do easy or correct. Easy is maintain same company file as a backup for tax filings and rename company file and edit FEIN and filing status in newly renamed copy.

Correct is start brand new company file for your LLC , from scratch. You have two entirely different companies. An S corp is a C corp first with an election for S statys for pass through taxing. An LLC is a state level pass through for an individual or partnership. You cannot just throw a switch changing from a corporation to an individual.

Robin4649 · ‎January 02, 2019

Thank you for your reply. Yes, I think correct is the way to go.

Malcolm Ziman · ‎January 02, 2019

@Robin4649 wrote:
Same company but I changed the entity only.

2 points:

1. From a risk point of view, which is the reason people form corporations, if the S Corp gets sued from something that happened when it was still in existence, then the assets of the LLC may be at risk, if you keep the same file

2. Even though there is a new FEIN, the employees' earnings in the old entity is included to determine SS and FUTA caps, if control remains the same (succession rule). This does not matter if the changeover is on 1/1.

Robin4649 · ‎January 02, 2019

Thank you for the information!

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Old company entries in new company ledger.