Closing an S-Corp in California


1

Sorry for the California specificity of my question, but that is where I am located. I want to close my S-corp (I'm taking a full time job). Ideally, I'd like to do it before the end of the year because California charges you an $800 fee if your corporation exists for even part of the year, regardless of whether you make money, lose money, or don't do a thing. However, I'm not sure I can close it (legally) as I have to file taxes in April, 2014 for tax year 2013. I don't even receive my w-2s for my sole employee (myself!) until January of 2014.

My questions then:

  1. How to close an S-corp (looking for a reference or website here)
  2. Can I close it before year end or somehow avoid the 2014 800 fee?

P.S. Sorry to see that this site is closing. I don't use it much but when I have a question it is very useful.

California USA S Corp

asked Nov 9 '13 at 06:02
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Dave
160 points

1 Answer


1

How to close an S-corp (looking for a reference or website here)

Secretary of State is your friend here. You fill a form for dissolution of your corporation. Read instructions carefully. There are several different forms in the PDF - you need to chose which ones are appropriate for your case, you don't need to fill all of them.

Can I close it before year end or somehow avoid the 2014 800 fee?

You can close it any time. Last tax return is filed 3 and 1/2 months after the end of your tax year, which would be the day when your corporation was closed. It is called "short year", and on the 1120-S you should check the "Final Return" checkbox to let the IRS know that the corporation is closed. For the State taxes - you similarly file the form 100S, and check the "Dissolved" checkbox.

As to the $800 fee, you were exempt from it for the first year, so you're good now.

answered Nov 9 '13 at 15:50
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Littleadv
5,090 points
  • Thank you littleadv for the answers. Unfortunately, this is not my first year. I have had S-Corp for 5+ years and dutifully paid my 800 / year. I just don't want to have to pay 800 for 2014! – Dave 6 years ago
  • @Dave then close it before 2014 starts. Sorry, you can't both have the corp active and avoid the $800, doesn't work this way. – Littleadv 6 years ago

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