Form 1120-S and Form 1040 are federal tax documents; the key difference between them is who files. Individual taxpayers complete and file the 1040, while businesses taxed as S corporations file the 1120-S.
If you’re part of an S corporation, the documents form the two halves of your tax picture. Your business first reports its profits and losses on 1120-S, and you’ll use details from the form to file your personal 1040.
Because you’ll need information from your company’s Form 1120-S to complete your own tax return, the deadlines are staggered. Here’s what to know about these tax forms, when they’re due, and how to request an extension if you can’t file them on time.
What is a Form 1120-S?
Form 1120-S is the federal tax form that S corporations and LLCs taxed as S corporations use. These businesses are pass-through entities, meaning they won’t pay federal taxes at the corporate level. Any profits and losses flow through the company to the shareholders.
The business starts by completing the Form 1120-S. It then creates and distributes a Schedule K-1 for each shareholder and for the IRS. The Schedule K-1 summarizes how much of the company’s profits, losses, credits, and deductions should be allocated to each shareholder for the tax year.
You won’t need the Form 1120-S itself to file your taxes, but you can request a copy if you want to review it. Here’s an overview of what’s on the form:
Income: The S corp reports its total revenue before expenses, including gross receipts and sales, the cost of goods sold, gross profit, net gain, and other income, such as capital gains and dividends.
Deductions: In this section, you’ll include details of qualified business expenses you want to write off.
Tax and payments: This section captures rare tax obligations for the S corp, like built-in gains.
Schedules B, K, L, M-1, and M-2: These are documents that provide more detailed information or calculations needed to complete the Form 1120-S.
Your business can send the completed Form 1120-S to the IRS either electronically or by mail. It’s due on the 15th day of the third month after the end of the S corp’s tax year. That’s usually March 15 if your business uses the calendar year.
You may request an extension if you need more time to get your taxes in order. The IRS automatically provides a six-month extension if you submit Form 7004 by the Form 1120-S deadline. To request additional time beyond that, you must show reasonable cause.
What is a Form 1040?
The Form 1040 is the standard tax form nearly all individual taxpayers use to report their income and claim credits and deductions each year.
If you receive income from an S corp, the business should send you a Schedule K-1 to summarize how much of its profits and losses should be allocated to you. The IRS also receives a copy of the form and uses it to match your personal income to what was reported by the business.
Seeing how a Form 1040 is structured can help you understand how your company’s tax information flows into your personal return. Here’s an overview of the main sections:
Income: Here’s where you’ll report all sources of your taxable income, which may include S corp income and capital gains and losses from the S corp.
Adjustments to income: Here you may also claim some K-1 items, like self-employment tax deductions.
Tax and credits: You’ll report any credits that pass through the S corp to you, then calculate how much tax you owe after applying eligible tax credits.
Payments: Here’s where you’ll list taxes already paid during the year. For instance, you may have paid self-employment taxes on some of your S corp income.
Refund: If you paid too much in taxes throughout the year, you’ll get a refund.
Amount you owe: If you paid too little in taxes, you’ll owe the balance.
The IRS accepts Form 1040 electronically or by mail. It’s due on April 15 or the next business day if that falls on a weekend or holiday.
If you need more time, you can request an automatic six-month extension by filing Form 4868 by the original due date. However, an extension to file is not an extension to pay—you’ll still need to estimate and pay any taxes owed by the April deadline to avoid penalties and interest.
Form 1120-S vs. Form 1040 breakdown
Here’s a side-by-side comparison of Form 1120-S vs. Form 1040:
Form 1120-S | Form 1040 | |
|---|---|---|
Who files it? | S corporations and companies taxed as S corporations | Individual taxpayers |
Purpose | Reports the income, deductions, credits, tax liability, and shareholder allocations for an S corporation | Reports the income, deductions, credits, and tax liability for an individual |
When is it due? | March 15 | April 15 |
How to request extension | Form 7004 | Form 4868 |
