How to handle an existing business&#39; income and expenses when incorporating
<p>I'm looking at incorporating my sole proprietorship as an S Corp. (An alternative I'm also looking into is an LLC taxed as an S Corp). </p>

<p>My existing company already has income and expenses in 2020. Even if I filed paperwork to incorporate today, I'd still desire to have this income and expense on the books for the year for my personal tax return.</p>

<p>I understand that assets can be transferred to the corporation when incorporating in exchange for shares, but how do I recognize this existing income and expense?</p>

<p>Do I still file a Schedule C for the portion of time that my business operated unincorporated, essentially recognizing the business in both it's states, as sole proprietor and as well as in it's incorporated state?</p>

<p>Please let me know where I can find reference material surrounding this.</p>

<p>Thank you!</p>

<h2>Update:</h2>

<p>The primary purpose for looking into an S Corp is to save money on my tax return and avoid the Self Employment tax and take advantage of any other potential tax opportunities that exist in these structures.</p>

<h2>Each entity is taxed on its own income</h2>

<p>So yes, you need to file multiple returns. Or wait until the start of new financial year to change structures so each is operating only in one period.</p>

united-states california tax-law incorporation