IRS Form 1120-S, U.S. Income Tax Return for an S Corporation
S corporations use Form 1120-S to report income, deductions, and credits and to pass items through to shareholders.
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About IRS Form 1120-S
Form 1120-S is the U.S. Income Tax Return for an S Corporation. A corporation that has made a valid S election files it to report income, gains, losses, deductions, and credits for the year. Like a partnership, an S corporation is generally a pass-through entity.
The S corporation reports each shareholder's share of income and other items on Schedule K-1, and shareholders report those amounts on their individual returns. The corporation itself usually does not pay federal income tax, although certain built-in gains and passive income taxes can apply.
The return includes Schedule K to summarize the corporation's total items and may require balance sheet and reconciliation schedules. Because S corporation rules are detailed, follow the official instructions or consult a tax professional.
Who needs to complete it
- Corporations that have a valid S corporation election in effect.
- Eligible limited liability companies that elected to be taxed as S corporations.
- Shareholders who need Schedule K-1 to report their share of income.
- Businesses filing their annual federal return as an S corporation.
How to fill out IRS Form 1120-S
- 1Enter the corporation's name, address, employer identification number, and the effective date of the S election.
- 2Report gross receipts, cost of goods sold, and ordinary business income or loss on the main form.
- 3Report separately stated items, such as certain deductions and credits, on Schedule K.
- 4Complete the balance sheet and reconciliation schedules if required.
- 5Prepare a Schedule K-1 for each shareholder showing their share of items.
- 6Calculate any corporate-level taxes that may apply, such as built-in gains tax.
- 7Have an officer sign the return.
- 8Follow the official line-by-line instructions and file by the deadline, providing K-1s to shareholders.
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Frequently asked questions
Does an S corporation pay federal income tax?
Usually not at the corporate level, because it is a pass-through entity. However, certain taxes such as the built-in gains tax or excess net passive income tax can apply in specific situations.
How do shareholders report their share of income?
Each shareholder receives a Schedule K-1 showing their share of income, deductions, and credits, and reports those amounts on their individual tax return.
When is Form 1120-S due?
For calendar-year S corporations the return is generally due in mid-March, with an extension available. Confirm the exact date in the current instructions.