Converting from an S corporation to a sole proprietorship

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@EmpressM wrote:

Last minute filer here! 😬 

I just discovered that my husband's business’s S corporation status was terminated by the state in mid-2016 due to not filing an annual report and not paying the fees. He still filed both corporation and personal tax returns for 2017. However, last year (2018 tax year) he filed as a sole proprietor using his name, not business, as recommended by his CPA at the time. But his business EIN is on the tax return.

• Can he do the same this year? Using the same EIN?
• Or should he leave the business EIN off and only use his social security number?
• Is there any point to officially dissolving the S corp if the business had no assets or debt?

Basically, my question is... can he continue to file as a sole proprietor from now on?

Thank you!

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Just because a corporation was dissolved by the State does not mean it was dissolved for tax purposes.  Was a "final" return filed for the corporation, along with any dissolution matters?  That really needs to be done.  A corporate return is due every year even with no income or expenses.  If no "final" return was filed and if no 2018 return was filed, there would already be thousands of dollars in late penalties.

The EIN of the corporation does NOT go on your personal tax return.  However, if the EIN was assigned to your husband's name, that is fine to be on the tax return.

If he is running his business as a self employed business, yes, Schedule C is fine.  But if he is still operating under the corporate name, then it is probably corporate income.