Form 1120-S is how S corporations report how much they make to the Internal Revenue Service (IRS). So, if your business is an S-corp or taxed as one, you’ll have to file Form 1120-S as your company’s federal income tax return.
Specifically, this form tells the IRS how much your company earned—your business income, deductions, and tax credits.
What is Form 1120-S used for, and do I have to fill out?
Yes, since IRS Form 1120-S is the S-corp income tax return (C-corporations use Form 1120), you’ll need to fill it out if your business is an:
- S corporation or
- LLC that’s taxed as an S-corp
An S-corp combines aspects of a corporation and a partnership. It allows for pass-through taxation, where income is not taxed at the corporate level but instead passed through to shareholders who report it on their individual tax returns. This is advantageous as it avoids “double taxation”—allowing business owners to pay only individual tax returns and avoiding corporate tax rates. This is a popular choice for self-employed people.
So 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—then file Form 1120-S.
What do I need to fill it out?
Form 1120-S 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 1120-S:
- The 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, which you’ll list individually with the Schedule K-1
- Details about assets, profits, losses, and deductions, including:
- Income statement
- Balance sheet
- Information about any fixed assets
- Shareholder transaction listings
- Income tax payments
- 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 1120-S instructions?
Ready to dive in? Here’s how to fill out the actual form.
Page 1
On this page, you’ll fill out basic information about your corporation and deductions, like salaries and wages, interest, and advertising. It also asks for information about your taxes and payments.
Certain lines to fill out require the completion of additional forms, including but not limited to these, depending on what pertains to your business:
- Income
- Form 1125-A, Cost of Goods Sold
- Form 4797, Sales of Business Property
- Deductions
- Form 1125-E, Compensation of Officers
- Form 4562, Depreciation and Amortization (Including Information on Listed Property)
- Form 7205, Energy Efficient Commercial Buildings Deduction
- Tax and Payments
- Schedule D (Form 1120-S)
- Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns
- Form 4136, Credit for Federal Tax Paid on Fuels
- Form 3800, General Business Credit
- Form 2220, Underpayment of Estimated Tax by Corporations
Schedule B
Schedule B on page two and the top of page three asks for a lot of information, but you might be able to skip some of the questions depending on your specific business. You’ll need to know your accounting method, your business 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.
More forms may need to be filled out (if applicable for your business) to complete this section:
- Form 8918, Material Advisor Disclosure Statement
- Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments
- Form 8990, Limitation on Business Interest Expense Under Section 163(j)
- Form(s) 1099
- Form 8996, Qualified Opportunity Fund
Schedule K
On Schedule K, which begins on page three and continues on the top of page four, you’ll summarize your shareholders’ income, deductions, and credits. To complete those fields, you’ll need information from the following extra forms, where applicable:
- Income (Loss)
- Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation
- Schedule D (Form 1120-S)
- Form 4797, Sales of Business Property
- Deductions
- Form 4562, Depreciation and Amortization (Including Information on Listed Property)
- Credits
Schedule L
If you answered no to questions 11a and 11b on Schedule B, you must complete Schedule L on page four. It’s a balance sheet, so 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 on page five, 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, expenses like entertainment and meals 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, also on page five, may be short, but it can be complicated. 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?
S-corp tax forms have different deadlines than personal tax returns. Form 1120-S is due by the 15th day of the third month at the end of the tax year. So if your tax year also follows the calendar year, ending on December 31 (as is the case for most small businesses), Form 1120-S is due on March 15. (If March 15 is a Saturday, Sunday, or holiday, filing on the next business day is considered on time for tax purposes.) Should you file a business tax extension, you’ll get an additional six months.
If you shut down your company, you must file Form 1120-S one last time. That due date again falls on the 15th day of the third month after your company is dissolved.
What are all the documents that need to be attached when filing the 1120-S form?
According to the IRS, all schedules and other forms applicable to your business need to be attached after page 5 of Form 1120-S, in the following order for your corporation’s tax return is correctly processed:
- Schedule N (Form 1120), Foreign Operations of US Corporations
- Schedule D (Form 1120-S), Capital Gains and Losses and Built-in Gains
- Form 4797, Sales of Business Property
- Form 8949, Sales and Other Dispositions of Capital Assets
- Form 8996, Qualified Opportunity Fund.
- Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation
- Form 1125-A, Cost of Goods Sold
- Form 8050, Direct Deposit of Corporate Tax Refund
- Form 4136, Credit for Federal Tax Paid on Fuels
- Form 8941, Credit for Small Employer Health Insurance Premiums
- Form 3800, General Business Credit
- Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments
- Form 6252, Installment Sale Income
- Schedule A (Form 8936), Clean Vehicle Credit Amount
- Schedules K-1 (Form 1120-S), Shareholder’s Share of Income, Deductions, Credits, etc.
- Form 8938, Statement of Specified Foreign Financial Assets
- Additional schedules in alphabetical order, including Schedule K-2 (Form 1120-S), Shareholders’ Pro Rata Share Items—International, and Schedules K-3 (Form 1120-S), Shareholder’s Share of Income, Deductions, Credits, etc.—International
- Additional forms in numerical order
Refer to the instructions from the IRS, which also provide this guidance:
- Fill out every applicable entry space on Form 1120-S and Schedule K-1. Don’t enter “See Attached” or “Available Upon Request” instead of completing the entry spaces.
- Enter the corporation’s name and Employer Identification Number (EIN) on any supporting statements or attachments, which should be put in the same order as the schedules or forms they support and attached last. Remember to show the totals on the printed forms.
How do I file Form 1120-S?
Form 1120-S can be filed electronically through the IRS’s e-file system or with most tax prep software like most tax forms. You can also file the form by mail. Here’s where to send your return.
Some S-corporations are more complicated than others. If yours has a complex tax situation, work with a tax preparer or accountant to ensure takes are done correctly.
Other 1120-S frequently asked questions
Is K-1 the same as 1120-S?
No, Schedule K-1 and Form 1120-S are distinct IRS forms. Form 1120-S is used by S-corporations to report income. A K-1 form is a document issued to each of its shareholders, indicating the shareholder’s share of income, deductions, and credits to be reported on their individual tax returns.
What is the difference between the 1120 and 1120-S forms?
Form 1120 is for regular C-corps, which are subject to corporate taxation. Form 1120-S is for S-corporations, allowing pass-through taxation where income is reported on shareholders’ individual tax returns. The main difference lies in the tax treatment and structure of these entities.