What the ProAxis S-Corp Engagement Covers
An S-Corp is not one filing. It is a chain of decisions and forms that have to stay consistent with each other. The election has to be timely. The salary has to be defensible. The federal 1120-S and the NJ CBT-100S have to agree. Payroll filings have to match the salary the return reports.
ProAxis handles that chain as one engagement, so nothing falls between a payroll company, a bookkeeper, and a tax preparer. Here is what is included:
- Election timing analysis: Before any form is filed, we model whether S status makes sense at your profit level — and in which year it should start. Our free S-Corp savings calculator shows the shape of the math; the engagement runs it on your real numbers.
- Form 2553 preparation and filing: We prepare the federal election, confirm shareholder consents, and track the 2-months-and-15-days deadline. If the deadline has passed, we evaluate late-election relief under Rev. Proc. 2013-30.
- Form 1120-S preparation: The annual federal S-Corp return, including Schedule K-1s for every shareholder, coordinated with each owner's personal 1040.
- Reasonable-compensation documentation support: We help owners assemble the records that support the salary figure — duties, hours, and comparable-pay data — so the salary/distribution split holds up under review.
- Payroll coordination: S status only works if the owner is actually on payroll. We coordinate with your payroll provider so wages, withholding, and W-2s line up with the return.
- NJ BAIT interaction: We evaluate whether the NJ Pass-Through Business Alternative Income Tax election helps your ownership group, and prepare the BAIT filings when it does.
- NJ CBT-100S filing: The New Jersey S-Corp return, including the gross-receipts-based minimum tax and NJ-specific adjustments.
Why S-Corp Work Needs a CPA, Not Just Software
Most owners choose S status for one reason: distributions are not subject to self-employment tax the way sole-proprietor profit is. Owners in similar situations have often reduced their payroll-tax exposure this way. Results vary — the outcome depends on profit level, the salary the role requires, and state taxes.
Software can print a Form 1120-S. It cannot tell you whether your salary is defensible, or whether the election still fits after a slow year. It also cannot weigh the NJ layer: the BAIT election, the CBT-100S minimum tax, and how each owner's residency changes the math. Those are judgment calls. Our guide comparing TurboTax vs a CPA for NJ businesses walks through where the software boundary sits.
The stakes are asymmetric. A salary set too low invites IRS reclassification of distributions as wages, with back payroll taxes and penalties. A salary set too high gives away the main benefit of the election. Getting the split right — and keeping records that support it — is the core of the engagement. Our guide to S-Corp reasonable salary for NJ owners walks through the IRS factors and the math.
Who the S-Corp Engagement Fits
S status is a fit for some businesses and a mistake for others. Broadly, three groups get the most out of this engagement:
Profitable LLCs & sole proprietors
Businesses with steady profit comfortably above a reasonable salary for the work. These owners are usually weighing the election for the first time.
Existing S-Corps switching CPAs
S-Corps whose prior preparer filed the 1120-S but never revisited salary, BAIT, or whether the election still fits.
Late or broken elections
Businesses that meant to elect and missed the window, or whose election has consistency problems. Rev. Proc. 2013-30 relief is often available.
Not sure whether the entity itself is right yet? Start with our comparison of S-Corp vs LLC for NJ business taxes, then run the free S-Corp savings calculator to see how the numbers move at your profit level.
What It Costs
S-Corp return preparation (Form 1120-S), including Schedule K-1s for shareholders, starts from $1,200. Election filing, BAIT filings, payroll coordination, and reasonable-comp documentation are scoped on top of that base, depending on what your situation needs.
Pricing shown reflects typical engagements and is not an offer. Actual fees are scoped during the engagement-letter process and depend on volume, entity structure, and specific scope. See Disclaimer.
The full fee schedule is on our pricing page. For context on what NJ firms charge across the market, see our guide to what a CPA costs in NJ in 2026.
How the Process Works
Fit review
A free consultation plus a look at last year's return and current-year numbers. We model the election — or review the existing one — before anything is filed.
Election and setup
If S status fits, we prepare Form 2553 (or the late-election package), set the salary framework, and coordinate payroll setup with your provider.
Year-round coordination
Salary and distributions are checked against actual profit during the year. BAIT estimates and NJ obligations are tracked so nothing surprises you in March.
Filing season
We prepare the 1120-S, the K-1s, the CBT-100S, and any BAIT return — coordinated with each shareholder's personal 1040.
ProAxis is a preparation-focused firm. We work under IRS Form 8821 tax-information authorization and refer full representation matters to qualified counsel. Everything is 100% virtual, serving businesses across NJ, NY, and PA from Bergen County, NJ.
Frequently Asked Questions
What is the deadline to file Form 2553 for an S-Corp election?
Form 2553 is due no more than 2 months and 15 days after the start of the tax year the election is to take effect. For a calendar-year business, that window closes in mid-March. A business can also file at any point during the preceding tax year. Source: IRS Instructions for Form 2553 (irs.gov), verified 2026-07-16.
Can a business still elect S-Corp status after the Form 2553 deadline?
Often, yes. Rev. Proc. 2013-30 allows an eligible business to request late-election relief for up to 3 years and 75 days after the intended effective date. The business must show reasonable cause for the delay. All shareholders must also have reported income consistent with an S-Corp election. The late Form 2553 is marked 'FILED PURSUANT TO REV. PROC. 2013-30' in the top margin. Source: IRS Instructions for Form 2553 (irs.gov), verified 2026-07-16.
What does reasonable compensation mean for an S-Corp owner?
The IRS requires a shareholder who works in the business to take a reasonable salary through payroll before taking distributions. 'Reasonable' means what a comparable business would pay someone else for the same duties, hours, and skill. There is no fixed safe-harbor number. Records that support the salary include a duties list, time spent, and market pay data. They are the strongest defense if the IRS examines the return.
How does an S-Corp interact with the NJ BAIT election?
New Jersey S-Corps can elect the Pass-Through Business Alternative Income Tax (BAIT). The entity pays NJ tax at the entity level and deducts that payment on its federal return. Shareholders then claim a credit on their NJ personal returns. BAIT is New Jersey's workaround to the federal SALT deduction cap. Whether the election helps depends on owner residency, income mix, and credits in other states. Owners in this situation often model both scenarios before electing.
What is the minimum tax on the NJ CBT-100S?
New Jersey assesses a minimum Corporation Business Tax on every S-Corp that files the CBT-100S, scaled by NJ gross receipts. For tax year 2026 the tiers are: $375 for receipts under $100,000. It is $562.50 from $100,000 to under $250,000, and $750 from $250,000 to under $500,000. It rises to $1,125 from $500,000 to under $1,000,000, and $1,500 at $1,000,000 or more. Members of an affiliated or controlled group with total payroll of $5,000,000 or more pay a $2,000 minimum. Source: NJ Division of Taxation Corporation Business Tax overview (nj.gov), verified 2026-07-16.
Figures above are verified against the IRS Instructions for Form 2553 and the NJ Division of Taxation CBT overview as of 2026-07-16. This page is general information, not tax advice, and does not create a CPA-client relationship.