If you're a small business owner with an S-Corporation, tax season often ends with a large PDF landing in your inbox and a request to sign an e-file authorization form.
Before you sign, it’s worth spending 10–15 minutes reviewing your return.
You don’t need to understand every tax rule, but you should confirm that the numbers make sense.
Here’s a simple guide to reviewing your S-Corp return with confidence.
Step 1: Confirm the Filing Deadline
S-Corporation returns are normally due March 15.
If an extension was filed, the deadline moves to September 15.
Look for Form 7004 near the beginning of the return package to confirm an extension was filed.
Step 2: Start With the Client Letter
The tax return cover letter is the roadmap for the entire return.
It usually explains:
- Taxes owed
- Refunds expected
- Estimated payments for the current year
- Any actions you need to take
If estimated payments are required, add them to your calendar right away. Check if your state’s online tax payment system allows you to schedule tax payments in advance to make you life much easier.
Step 3: Check the Balance Sheet
The balance sheet appears on Schedule L.
You don’t need to review every number — just confirm the totals look reasonable.
If the return is prepared on a cash basis, make sure you're comparing it to cash-basis financial reports. How do you know? Look for the tax return accounting method on Schedule B line 1.
Step 4: Confirm Officer Compensation
S-Corp owners must pay themselves reasonable compensation.
Check Line 7 on Page 1 and confirm the number matches your payroll records.
Step 5: Compare the Profit & Loss
The income reported on the return should look familiar compared to your accounting reports.
Some differences are normal because accountants often add:
- Depreciation
- Amortization
- Tax adjustments
If something looks drastically different, ask why. See Step 7 below for more info on tax adjustments.
Step 6: Look at Schedule K
Schedule K includes items that receive special tax treatment, such as investment income or charitable contributions.
These items eventually flow through to your personal tax return via your Schedule K-1.
Step 7: Understand Book-to-Tax Adjustments
Schedule M-1 reports the accounting (or ‘book’) net income on line 1 and also explains why book income and taxable income differ. If your net income per books on line 1 doesn’t match the return, you can request adjusting journal entries from your accountant to see what adjustments were made.
Common book to tax differences on Schedule M-1 include depreciation differences or non-deductible expenses, such as penalties and entertainment.
Step 8: Review Your K-1 Carefully
Your Schedule K-1 shows your share of company income that will flow through to your personal tax return.
Confirm:
- Mailing Address
- Ownership percentage
- Income allocation
- Distributions
- Loans
Bonus tip: Ask about your shareholder basis. Your basis determines whether losses are deductible and whether distributions are tax-free. Your accountant can tell you where your basis stands after the return is prepared.
Step 9: Check State Filings
If your business operates in multiple states, you may see multiple state tax returns.
Make sure they match where your business actually operates.
Final Thought
You don’t need to be a tax expert to review your return.
But taking a few minutes to understand the big picture helps you:
- Catch mistakes
- Stay informed about your finances
- Avoid surprises later
And if something doesn’t make sense, that’s exactly what your accountant is there for.