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Form 7203 for Physician / Doctor S-Corps

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  • Form 7203 for Physician / Doctor S-Corps

    What is everyone doing about this new-for-2021-taxes Form 7203 that is required if you take a distribution from an S-Corp? This form is required to be filed with 1040/personal taxes for the first time this year (for S-corp owners that took a distribution--which is likely anyone here who uses an s-corp for their medical practice).

    I would think that there are lots of physicians that have their practices set up as S-Corp's but I have NO idea how to figure out stock basis for a one physician (one W-2) S-Corp where I am the only physician and only employee in the practice.

    Any thoughts from anyone or any resources or step by step instructions on how to fill out this form for medical professionals that are set up as S-corps?

    Thanks in advance for any information regarding this.

  • #2
    Are you saying your CPA does not know how to calculate your basis?
    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      I do my own taxes with Turbotax Business (1120S) and Turbotax Premier (1040). I also use Quickbooks for my accounting and payroll. It's a simple operation. I am an anesthesiologist that does locum work only. Only one employee S Corp setup.

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      • #4
        Originally posted by jfoxcpacfp View Post
        Are you saying your CPA does not know how to calculate your basis?
        Perhaps they do their own taxes? I don't with s-corp but good to know theres a new form I can impress my CPA again

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        • #5
          Regardless of this new form, you should have been tracking the S-Corp's basis since day one.

          Just because you can use TurboTax to file an S-Corp's tax return, K-1, and Form 1040 return with the S-Corp's 2% shareholder-employee's W-2 wages and S-Corp taxable distribution. Does not mean you should at least for the first couple of years.

          Two of my favorite expressions are; just because you can do something, does not mean you should do something" and "you do not know what you do not know."

          This especially applies to S-Corp's. jfoxcpacfp correctly has been recommending as long as she has been a forum member that S-Corps should use a CPA. This is not just self-interest as she has more business that she can handle and has often made recommendations that would reduce a CPAs revenue.

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          • #6
            Are you not able to file this form on H&R Block Deluxe or do you have to have a fancier version? I can't even find Form 7203 when I search through the forms. Can this thing not be e-filed with the personal return?
            Last edited by CordMcNally; 04-01-2022, 07:27 PM.

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            • #7
              Originally posted by childay View Post

              Perhaps they do their own taxes? I don't with s-corp but good to know theres a new form I can impress my CPA again
              Actually, I was trying to make a point (which SR ran with).

              Partnership and S-corp basis is a tough concept and even many CPAs don’t handle it with appropriate respect. To be fair, it is the responsibility of the shareholder to correctly track basis but anyone who pays a CPA for tax advice and prep has every right to expect the CPA to provide that information and to track it correctly. Not to do so is a cop out. Maybe the IRS is finally catching on to this issue as an “underserved” audit target.
              Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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