Tucson Tax Team LLC + 6111 East Grant Road + Tucson, AZ 85712 + (520) 777-7844
Our responsibility is to accurately prepare your Federal and State Corporation income
tax returns including all supporting schedules. We are not responsible for the preparation of other business taxes
such as state use tax, payroll tax, etc. We will complete income tax returns using the information you provide to
us. Although we may ask for explanations regarding certain items, we will not audit or verify any information. If
we encounter a situation in which the tax laws are unclear, we will advise you of it and use our professional
judgment as to the correct handling of the situation. Our work in connection with the preparation of your Form
1120S filing does not include any procedures designed to discover defalcations or other irregularities, should any
exist. Information you provide will be kept confidential but is not protected from the IRS. We cannot disregard
the implications of any information you provide in the process of preparing the return. Your returns are subject to
review by taxing authorities. Should an examination occur, we are available to represent you at an additional fee.
Any additional tax, penalties or interest assessed are your responsibility.
Fees and Deadlines: Our fees are based upon the complexity of the tax return and the completeness of
information you provide. S Corp returns are due on March 15
but may be extended until September 15
Income: The IRS requires you to report all income received in a trade or business including bartering, cancelled
debt, kickbacks, etc. The IRS receives income information from merchant cards and may test to make sure you are
reporting all your income based on credit card sales reported.
Losses: The amount of loss each shareholder can take on their personal tax return is limited to that shareholder’s
investment in the S Corp. If is each shareholder’s responsibility to maintain and keep a record of their basis.
Bookkeeping: The IRS places a higher burden of responsibility on business entities. It is important that you have
proper bookkeeping procedures in place to support the income/expenses claimed on the business tax return. In
most cases, you should be able to produce a year-end balance sheet; this is one of the first items requested in an
audit. If you provide your own bookkeeping, we highly recommend that you have your books reviewed by a
professional bookkeeper before you provide us with a P&L and balance sheet.
Deductions: A 2% or higher shareholder must include the cost of premiums paid by the S Corp as wage income if
the S Corp deducts the premiums Mileage from a non-company vehicle is subject to reimbursement from an
accountable plan in order to be deductible. 50% of the cost of business-related meals is deductible. 50% of meals
just for yourself are deductible only if you are away from your tax home. Meal expenses must be documented
with the date, the client or associate, and the purpose of the meal. Travel is deductible if you can demonstrate a
substantial business purpose. These expenses may include ground/air transportation, lodging, meals as described
above, incidental expenses. If your travel is mixed business and personal, your deduction may be limited. In
order to deduct expenses that the shareholder and employees pay personally, the S Corp must have a written
accountable plan that states how and when employees will be reimbursed for expenses that are paid outside the S
Corp. All employees must follow the plan’s guidelines.
S Corporation Engagement Letter Tax Year 2020
Thank you for using Tucson Tax Team for your tax preparation needs. Clear
communication is key to a successful business relationship. The purpose of this letter is
to ensure sure we share an understanding of the services we provide.