A new client filing for 2025 used an inexpensive entity creation service about 2 years ago. They also used a online tax preparation firm for 2024. These online simple tax prep services can be efficient for many taxpayers. However, using these one-size-fits-all services can lead to challenges.

For this client, the MTM election, 3115, and S CORP election were close, but not quite correct. This client came to us for tax preparation after the entity extension deadline this spring. All documents we received appeared to be for a single-member LLC. So, we extended their return as a SMLLC and personal return. After some time, the client provided their documents and the return was finished.

But just as we presented a draft for approval, a realization came to them and they added a 2553 S CORP election, filed in 2025, after the original 75-day window.

This single misplaced document has now caused several problems: the prepared return is wrong, the election of MTM is questionable, the tax payer is exposed to a $3000 FTF penalty, and a 3115 was included that should not have been filed.

Sometimes it is less actually expensive to do it right the first time. Schedule a free consultation with us today to do your tax prep right the first time.