Be sure that the correct business activity code is shown on Page 1 of Form 1120S each year.
If an S corporation conducts more than one trade or business, a primary business activity code needs to be selected.
Learn the importance of choosing the correct business activity code to ensure that what shareholder-employees report on their individual returns is consistent with what is on the corporation's return.
This index offers a collection of all sorts of neat little links, including currency exchange rates, historical stock prices, and an IRS business activity code
A business tax return cannot be filed without an IRS business activity code.
Example: There is no IRS business activity code for Internet Service Providers.
Hence, the right business activity code for Internet Service Providers is 514100, the higher-level code for 514191.
Where the taxpayer's principal business activity code, as described in the North American Industry Classification System (NAICS), involves retail, wholesale, mining, or certain information industries, the taxpayer generally may not rely upon Revenue Procedure 2002-28 when attempting to use the cash method of accounting.
Where the taxpayer's NAICS principal business activity code is as described above (retail, wholesale, mining, publishing, or sound recording), other conditions and restrictions apply.
A taxpayer that has satisfied the preceding criteria next determines whether its principal business activity code under the North American Industry Classification System (NAICS) is an ineligible one.
For example, a taxpayer that provides services, including the provision of property incidental to the services, may change to the cash method of accounting pursuant to the revenue procedure even if its principal business activity code makes it ineligible.
Also, the principal business activity codes
on the new form are based on the new North American Industry Classification System, which has replaced the Standard Industrial Classification system.