Form 1120-S: U.S. Income Tax Return for S Corporations What is Form 1120-S? Form 1120-S is the federal income tax return used by S corporations to report income, gains, losses, deductions, credits, and other tax-related information to the IRS. It must be filed by the 15th day of the third month after the end of the corporation’s tax year (e.g., March 15 for calendar-year filers). Who must file
* Any corporation that has elected S corporation status and had that election accepted by the IRS must file Form 1120-S.
* S corporations are typically smaller businesses (fewer than 100 shareholders) that are taxed as pass-through entities: the corporation itself generally does not pay federal income tax; instead, income and losses are passed through to shareholders.
What information is reported Form 1120-S collects business-identifying details and financial information, including:
- Corporation name, mailing address, and Employer Identification Number (EIN)
- Date of incorporation and effective date of S election
- Total assets and business activity code
- Income, gains, losses, deductions, credits, taxes, and payments for the tax year
- Balance sheet and reconciliation items (via schedules) Explore More Resources
Required schedules and Schedule K-1 Form 1120-S includes several schedules that capture specific details:
- Schedule B — Other Information
- Schedule K — Shareholders’ Pro Rata Share Items
- Schedule L — Balance Sheet per Books
- Schedule M-1 — Reconciliation of book income to tax income
- Schedule M-2 — Analysis of accumulated adjustments and shareholder accounts Every shareholder must receive a Schedule K-1 (Form 1120-S). The K-1 reports each shareholder’s share of income, losses, credits, and deductions, which they use to prepare their individual tax returns. If a shareholder’s ownership percentage changes during the year, their share of items must be prorated accordingly. Explore More Resources
How to file
* Filing methods: Form 1120-S can be filed electronically (preferred) or on paper by mail. The IRS strongly encourages electronic filing to reduce processing delays.
* Preparation: Small S corporations may prepare the form using tax software. Corporations with more complex situations often hire a tax professional or accountant to reduce the likelihood of errors.
* Forms and instructions are available from the IRS.
Deadlines and examples
* Standard deadline: 15th day of the third month after the corporation’s tax year ends.
* Examples:
* Calendar year (Jan 1–Dec 31): due March 15
* Fiscal year (July 1–June 30): due September 15
Key considerations
* Pass-through taxation: S corporations pass income and losses to shareholders, avoiding corporate-level income tax and eliminating double taxation on distributions.
* Ownership changes: When shares are bought, sold, or transferred during the year, shareholder allocations must be prorated on a per-share basis.
* Accuracy and timeliness: Properly completing Form 1120-S and timely distributing K-1s to shareholders is essential to ensure correct individual tax reporting.
Bottom line Form 1120-S is the annual tax return for S corporations. It reports corporate financial activity and allocates tax items to shareholders through Schedule K-1. File by the 15th day of the third month after the tax year ends, preferably electronically, and consult a tax professional if the corporate tax situation is complex. Sources
* IRS, Instructions for Form 1120-S
* IRS, About Form 2553 (Election by a Small Business Corporation)
* IRS, About Schedule K-1 (Form 1120-S)