Form 1120S is how S corporations report how much they make to the IRS. So if your business is an S-corp or taxed as one, you’ll have to file Form 1120S as your company’s federal income tax return.
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Specifically, this form tells the IRS how much your business earned—your income, deductions, and credits.
Do I have to fill out Form 1120S?
Since Form 1120S is the S-corp income tax return, you’ll need to fill it out if your business is an:
- S corporation or
- LLC that’s taxed as an S-corp
If you’ve filed (or are filing) Form 2553, which declares that your business is an S corp—or is an LLC that should be taxed as one—you’ll also need to file Form 1120S.
Are you an S-corp shareholder? Then you should report your earnings on your personal tax return, not Form 1120S.
What do I need to fill it out?
Form 1120S can be downloaded straight from the IRS website. It’s also available through most tax filing software programs.
You need to have the following information on hand while filling out Form 1120S:
- Date you became an S-corp
- Date your business was incorporated
- Your business activity code
- Your employer identification number
- The number of shareholders you have
- Details about assets, profits, losses, and deductions
- Income statement
- Balance sheet
- Information about any fixed assets
- Shareholder transaction listings
- Income tax payments
- And more
- Accounting method and whether it’s cash or accrual
- Information about stock your business owns
A lot of this information can be complicated. Don’t be afraid to work with your accountant to ensure the form is filled out correctly.
What are the Form 1120S instructions?
Ready to dive in? Here’s how to fill out the actual form.
On this page, you’ll fill out basic information about your corporation, as well as information about deductions, like salaries and wages, interest, and advertising. It also asks for information about your taxes and payments.
Page two and three—or Schedule B—asks for a lot of information, but you might be able to skip some of the questions, which are dependent on your specific business. You’ll need to know your accounting method, your businesses’ activity code, and a brief description of your product or service.
The rest of this section will ask specific questions about your shareholders and your corporation’s business dealings and payments.
On Schedule K, you’ll summarize your shareholders’ income, deductions, and credits.
If you answered no to questions 11a and 11b on the Schedule B, you’ll need to complete Schedule L, which is a balance sheet. This information should be easily accessible from your accounting software.
Schedule M-1 and M-2
Did you complete Schedule L? Then you’ll need to complete Schedule M-1, too.
This section reconciles your company’s income or loss per your accounting books—the numbers used to make business decisions on a day-to-day basis—with your tax return. Sometimes things like entertainment and meal expenses aren’t included in your taxes, but they may be registered as deductions in your accounting software. This form makes sure everything is in sync.
Schedule M-2 may be short, but it can be complicated. Basically, it’s designed to tell you your business balance, or how much money is left over after income and losses. That figure is calculated by subtracting the difference between your company’s income and losses from your balance at the beginning of the tax year.
When is the form due?
If your business runs on a calendar year, Form 1120S is due on March 15. If you file a business tax extension, your due date is September 16.
S-corp tax forms have more complicated deadlines than personal tax returns since there’s no hard-and-fast date. Technically, Form 1120S is due by the 15th day of the third month after the end of your tax year.
Here’s what that means: If your tax year is on a calendar year and ends on December 31, (this is the case for most small businesses), then Form 1120S is due on March 15. (If March 15 is a Saturday, Sunday or holiday, file on the next business day.)
If you shut down your company, you will have to file Form 1120S one last time. That due date falls, again, on the 15th day of the third month after your company is dissolved.
How do I file Form 1120S?
Like most tax forms, Form 1120S can be filed electronically through the IRS’s e-file system, or with most tax prep software.
You can also file the form by mail. Here’s where to send your return.