This form is used to report income, gains, losses, deductions, credits, and other information of a domestic corporation or other entity for any tax year covered by an election to be an S corporation.
The U.S. Income Tax Return for an S Corporation, or Form 1120-S, is used by S corporations in order for them to state any income, gains, losses, deductions, credits, and other information belonging to domestic corporations alike for every tax year they are registered as an S corporation.
An S corporation is a kind of corporation that does not pay any income taxes because they are elected to be taxed under subchapter S of Chapter 1 of the Internal Revenue Code. Form 1120-S is for S corporations and businesses registered as such and, therefore, avoid any double taxation. Since S corporations’ incomes pass through to the owners, the S corporations’ income is stated on the shareholder’s personal income tax returns, meaning they do not pay corporate taxes but, instead, are taxed at the owners’ personal income tax rate.
Form 1120-S should be filed by S corporations. The structure of S corporations allows the corporation to pass income, losses, deductions, and credits through to the shareholders.
If a corporation is elected to be an S corporation by completion and submission of Form 2553 and the Internal Revenue Service (IRS) has accepted their application, that corporation must also file and accomplish Form 1120-S. With the use of Form 1120-S, the IRS would be able to know the ownership percentage in the corporation and allocate accurately the profits and losses each shareholder of the corporation should get.
Aside from stating the profits and losses, Form 1120-S is crucial for S corporations because, as mentioned, it informs the IRS of the ownership percentage of each individual shareholder and allocates these profits and losses accordingly. This will help in determining any tax payments or refunds due to the individual shareholders on their personal income tax returns. The reason why corporations and businesses apply to be taxed as S corporations is to pass the tax liabilities onto the business’ owners, so letting the IRS know about the individual ownership of each shareholder guarantee that the business or corporation would actually secure this benefit.
Corporations that have less than one-hundred (100) shareholders may opt to apply to be an S corporation for the purpose of avoiding double federal taxation.
You can get a copy of Form 1120-S above by downloading the document form. You may also choose to fill it out online using our PDF Editor.
You can file the form electronically or mail it to the IRS.
As a general rule, an S corporation should file their Form 1120-S by the fifteenth (15th) day of the third (3rd) month after the end of its tax year.
Unless you have submitted an application for extension, the deadline for filing Form 1120-S is on March 15, 2021.
Before you begin accomplishing Form 1120-S, here is a list of documents that you may need access to, to complete the form accurately:
Once you have these documents and the necessary information you will be needing from them, begin accomplishing the form. Provide and report only accurate, valid, and true statements on Form 1120-S.
Form 1120-S consists of eight (8) parts that need to be filled out. For information on how to complete each section of the form, please refer to the guide below.
Income and Deductions
Tax and Payments
Shareholders’ Pro Rata Share Items Section
Balance Sheet per Books
Reconciliation of Income (Loss) per Books with Income (Loss) per Return
Schedule M-2 – Analysis of Accumulated Adjustments Account, Other Adjustments Account, and Shareholders’ Undistributed Taxable Income Previously Taxed