Fillable Form 1120-S

What is Form 1120-S?

Form 1120-S, U.S. Income Tax Return for an S Corporation, is a tax form issued by the Internal Revenue Service (IRS). It is used to report the income, gains, losses, deductions, credits, and other relevant financial information of a domestic corporation or other entity for any tax year covered by an election to be an S corporation.

How to fill out Form 1120-S?

Page 1

Tax year beginning

Enter the month when the tax year begins.

Tax year ending

Enter the month when the tax year ends.

20

Enter the year when the tax year ends.

Name and Address

REMINDER

• Don't use the address of the registered agent for the state wherein the corporation is incorporated. For example, if your business was incorporated in Delaware or Nevada and the corporation's principal office is in Little Rock, Arkansas, your corporation should enter the Little Rock address.
• If your corporation receives its mail in the care of a third party (such as an accountant or an attorney), enter "C/O" on the street address line, followed by the third party's name and street address or P.O. box.
• If your corporation has a foreign address, include the city or town, state or province, country, and foreign postal code. Don't abbreviate the country name. Follow the country's practice for entering the name of the state or province and postal code.

Name

Enter your corporation's true name, as outlined in the charter or other legal document creating it.

Number, street, and room or suite no.

Enter the number, street, and room, or suite number of your corporation's principal office or place of business.

For the Post Office box, show the box number instead.

City or town, state or province, country, and ZIP or foreign postal code

Enter the city or town, state or province, country, and ZIP or foreign postal code of your corporation's principal office or place of business.

A

Enter the S election effective date.

B

Enter the business activity code number.

C

Mark if you are filing Schedule M-3.

D

Enter your corporation's EIN. If your corporation doesn't have an EIN, you may apply online or fax or mail Form SS-4, Application for Employer Identification Number.

E

Enter the incorporation date of your corporation.

F

Enter your corporation's total assets, as determined by the accounting method regularly used in keeping the corporation's books and records, at the end of the tax year. If there were no assets at the end of the tax year, enter -0-.

If the corporation is required to complete Schedule L, enter total assets from Schedule L, line 15, column (d), on page 1, item F. If the S election terminated during the tax year, see the instructions for Schedule L, later, for special rules that may apply when figuring the corporation's year-end assets.

G

Mark Yes, if your corporation is electing to be an S corporation with this tax year. If so, attach Form 2553 if not already filed. Mark No, if not.

H

Mark "Final return" if this is your corporation's final return, and it will no longer exist.

Mark "Name change" if your corporation changed its name since it last filed a return. If so, your corporation must also have amended its articles of incorporation and filed the amendment with the state where it was incorporated.

Mark "Address change" if your corporation has changed its address since it last filed a return, including a change to an "in care of" address.

Mark "Amended return" if this amends a previously filed return.

Mark "S election termination or revocation" if the corporation has terminated or revoked its S election.

I

Enter the number of shareholders who were shareholders during any part of the tax year.

J

Mark (1) if your corporation aggregated activities for section 465 at-risk purposes. Mark (2) if your corporation grouped activities for section 469 passive activity purposes.

INCOME

Enter only trade or business activity income on lines 1a through 5. Don't report rental activity income or portfolio income on these lines.

Line 1a

Enter the gross receipts or sales from all business operations except for amounts that must be reported on lines 4 and 5.

Line 1b

Enter the cash and credit refunds the corporation made to customers for returned merchandise, rebates, and other allowances made on gross receipts or sales.

Line 1c

Subtract line 1b from line 1a and enter the difference as the balance.

Line 2

Enter the cost of goods sold. Attach Form 1125-A, Cost of Goods Sold.

Line 3

Subtract line 2 from line 1c and enter the difference as the gross profit.

Line 4

Enter the net gain (loss) from Form 4797, line 17. Attach Form 4797, Sales of Business Property. Include only ordinary gains or losses from the sale, exchange, or involuntary conversion of assets used in a trade or business activity.

Line 5

Enter any other trade or business income (loss) not included on lines 1a through 4. Attach statement.

Line 6

Add lines 3 through 5 and enter the sum as the total income (loss).

DEDUCTIONS

Enter only trade or business activity deductions on lines 7 through 19.

REMINDER

• Distributions and other payments by an S corporation to a corporate officer must be treated as wages to the extent the amounts are reasonable compensation for services rendered to the corporation.
• If your corporation claims credit for any wages paid or incurred, it may need to reduce the amounts on lines 7 and 8.
• Reduce the amounts reported on lines 7 and 8 by the nonrefundable and refundable portions of the new CARES Act employee retention credit claimed on the corporation's employment tax return.

Line 7

Enter the total compensation of all officers paid or incurred in the trade or business activities of the corporation.

Line 8

Enter the total salaries and wages paid or incurred to employees, other than officers, during the tax year.

Line 9

Enter the cost of repairs and maintenance not claimed elsewhere on the return, such as labor and supplies, that does not add to the value of the property or appreciably prolong its life.

Line 10

Enter the total debts that became worthless in whole or in part during the tax year, but only to the extent, such debts relate to a trade or business activity.

Line 11

Enter the rent paid on business property used in a trade or business activity.

Line 12

Enter the taxes and licenses paid or incurred in the trade or business activities of the corporation, unless they are reflected elsewhere on the return.

Line 13

Enter only interest incurred in the trade or business activities of the corporation that isn't claimed elsewhere on the return.

Line 14

Enter the depreciation not claimed on Form 1125-A or elsewhere on the return.

Line 15

Enter the depletion. Do not deduct depletion for oil and gas properties.

Line 16

Enter deductions for advertising.

Line 17

Enter the deductible contributions not claimed elsewhere on the return made by your corporation for the employees under a qualified pension, profit-sharing, annuity, or a simplified employee pension (SEP) or SIMPLE IRA plan, or any other deferred compensation plan.

Line 18

Enter the deduction for employee benefit programs.

Line 19

Enter other deductions that aren't listed on Form 1120-S. Attach a statement listing by type and amount of each deduction included on this line.

Line 20

Add lines 7 through 19 and enter the sum as the total deductions.

Line 21

Subtract line 20 from line 6 and enter the difference as the ordinary business income (loss).

TAX AND PAYMENTS

Line 22a

Enter the excess net passive income or LIFO recapture tax.

Line 22b

Enter the tax from line 23 of Part III of Schedule D.

Line 22c

Add lines 22a and 22b and enter the sum.

Here is a list of other taxes to be included in the total for line 22c and the required forms to be attached to Form 1120-S.

• Investment credit recapture tax. Attach Form 4255, Recapture of Investment Credit.
• Interest due under the look-back method — completed long-term contracts. Attach Form 8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts.
• Interest due under the look-back method — property depreciated under the income forecast method. Attach Form 8866, Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method.

Line 23a

Enter the 2020 estimated tax payments and the 2019 overpayment credited to 2020.

Line 23b

Enter the tax deposited with Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns.

Line 23c

Enter the credit for federal tax paid on fuels and attach Form 4136, Credit For Federal Tax Paid On Fuels.

Line 23d

Enter the tax and payments reserved for future use.

Line 23e

Add lines 23a through 23d and enter the sum.

Line 24

Enter the estimated tax penalty. Mark the box if Form 2220, Underpayment of Estimated Tax By Corporations, is attached.

Line 25

Enter the amount owed if Line 23e is smaller than the total of Lines 22c and 24.

Line 26

Enter the amount overpaid if Line 23e is larger than the total of lines 22c and 24.

Line 27

Enter the amount from line 26:

Enter the amount credited to the 2021 estimated tax.

Enter the amount refunded.

REMINDER

Complete Form 8050, Direct Deposit of Corporate Tax Refund, and attach it to the corporation's return if you want a direct deposit of refund to your accounts.

SIGN HERE

By signing this, you declare that all information is correct and complete.

Signature of Officer

Enter your signature.

Date

Enter the date.

Title

Enter the title.

May the IRS discuss this return with the preparer shown below?

Mark Yes, if the IRS will discuss your return with the preparer shown below. If not, mark No.

PAID PREPARER USE ONLY

Print/Type preparer’s name

Enter the preparer’s name.

Preparer’s Signature

Enter the preparer’s signature.

Date

Enter the date.

Check if self-employed

Mark the box if the preparer is self-employed.

PTIN

Enter the Preparer Tax Identification Number (PTIN).

Firm’s Name

Enter the firm’s name.

Firm’s Address

Enter the firm’s address.

Firm’s EIN

Enter the firm’s Employer Identification Number.

Phone No.

Enter the phone number.

Page 2

SCHEDULE B. OTHER INFORMATION

Complete all items that apply to the corporation.

Item 1

Mark the accounting method. Mark box “a” for Cash, “b” for Accrual, and “c” for Other. If other, enter specified details.

Item 2

Enter the business activity.

Enter the product or service.

Item 3

At any time during the tax year, was any shareholder of the corporation a disregarded entity, a trust, an estate, or a nominee or similar person?

Mark Yes, if any shareholder of the corporation is a disregarded entity, a trust, an estate, or a nominee or similar person. If so, attach Schedule B-1, Information on Certain Shareholders of an S Corporation.

Mark No, if not.

Item 4

At the end of the tax year, did the corporation:

• Own directly 20% or more, or own, directly or indirectly, 50% or more of the total stock issued and outstanding of any foreign or domestic corporation?

Mark Yes, if the corporation directly owned 20% or more, or directly or indirectly owned 50% or more of the total stock issued and outstanding of any foreign or domestic corporation at the end of the tax year. If so, complete table (i) through (v). Mark No, if not.

RULES FOR CONSTRUCTIVE OWNERSHIP:

If an entity is owned, directly or indirectly, by or for another entity, the owned entity is considered to be owned proportionately by or for the owners (shareholders, partners, or beneficiaries) of the owning entity.

(i) Name of Corporation

Enter the name of the corporation.

(ii) Employer Identification Number (if any)

Enter the Employer Identification Number, if any.

(iii) Country of Incorporation

Enter the country of incorporation.

(iv) Percentage of Stock Owned

Enter the percentage of stock owned.

(v) If Percentage in (iv) Is 100%, Enter the Date (if any) a Qualified Subchapter S Subsidiary Election Was Made

If the percentage in (iv) is 100 %, enter the date a qualified subchapter S subsidiary election was made, if any.

• Own directly an interest of 20% or more, or own, directly or indirectly, an interest of 50% or more in the profit, loss, or capital in any foreign or domestic partnership (including an entity treated as a partnership) or in the beneficial interest of a trust?

Mark Yes, if the corporation directly owns an interest of 20% or more, or directly or indirectly owns an interest of 50% or more in the profit, loss, or capital in any foreign or domestic partnership or the beneficial interest of trust at the end of the tax year. If so, complete table (i) through (v). Mark No, if not.

RULES FOR CONSTRUCTIVE OWNERSHIP:

The "maximum percentage owned" means the highest percentage of interest in a partnership's profit, loss, or capital as of the end of the partnership's tax year, as determined under the partnership agreement when taking into account the constructive ownership rules discussed in “a.” Use a reasonable method in arriving at the percentage items if the partnership agreement doesn't express the partner's share of profit, loss, and capital as fixed percentages.

(i) Name of Entity

Enter the name of the entity.

(ii) Employer Identification Number (if any)

Enter the Employer Identification Number, if any.

(iii) Type of Entity

Enter the type of entity.

(iv) Country of Organization

Enter the country of the organization.

(v) Maximum Percentage Owned in Profit, Loss, or Capital

Enter the maximum percentage owned in profit, loss, or capital.

Item 5a

At the end of the tax year, did the corporation have any outstanding shares of restricted stock?

Mark Yes, if the corporation has any outstanding shares of restricted stock at the end of the year. If so, complete Lines (i) and (ii). Mark No, if not.

(i) Total shares of restricted stock

Enter the total shares of restricted stock.

(ii) Total shares of non-restricted stock

Enter the total shares of non-restricted stock.

Item 5b

At the end of the tax year, did the corporation have any outstanding stock options, warrants, or similar instruments?

Mark Yes, if the corporation has any outstanding stock options, warrants, or similar instruments. If so, complete Lines (i) and (ii). Mark No, if not.

(i) Total shares of stock outstanding at the end of the tax year

Enter the total shares of stock outstanding at the end of the tax year.

(ii) Total shares of stock outstanding if all instruments were executed

Enter the total shares of stock outstanding if all instruments were executed.

Item 6

Has this corporation filed, or is it required to file, Form 8918, Material Advisor Disclosure Statement, to provide information on any reportable transaction?

Mark Yes, if the corporation filed, or is required to file, Form 8918, Material Advisor Disclosure Statement. For details, see the Instructions for Form 8918. Mark No, if not.

Item 7

Mark the box if the corporation issued publicly offered debt instruments with original issue discounts. If marked, the corporation may have to file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments.

Item 8

Enter the net unrealized built-in gain reduced by net recognized built-in gain from prior years if:

1. A corporation was a C corporation before it elected to be an S corporation or the corporation acquired an asset with a basis determined by reference to the basis of the asset (or the basis of any other property) in the hands of a C corporation; and
2. Corporation has net unrealized built-in gain in excess of the net recognized built-in gain from prior years.

Item 9

Did the corporation have an election under section 163(j) for any real property trade or business or any farming business in effect during the tax year?

Mark Yes, if the taxpayer has an election in effect to exclude a real property trade or business or a farming business from section 163(j). See section 163(j) and the Instructions for Form 8990, Limitation on Business Interest Expense Under Section 163(j), for more information. Mark No, if not.

Item 10

Does the corporation satisfy one or more of the following?

Mark Yes, if the corporation satisfies one or more of the following:

• The corporation owns a pass-through entity with current, or prior year carryover, excess business interest expense;

• The corporation’s aggregate average annual gross receipts (determined under section 448(c)) for the 3 tax years preceding the current tax year are more than $26 million and the corporation has business interest expense;

• The corporation is a tax shelter and the corporation has business interest expenses.

If Yes, complete and attach Form 8990. Mark No, if not.

Item 11

Does the corporation satisfy both of the following conditions?

• The corporation’s total receipts for the tax year were less than $250,000.

• The corporation’s total assets at the end of the tax year were less than $250,000.

Mark Yes, if the corporation satisfies both conditions. If so, the corporation is not required to complete Schedules L and M-1. Mark No, if not.

Page 3

Item 12

During the tax year, did the corporation have any non-shareholder debt that was canceled, was forgiven or had the terms modified so as to reduce the principal amount of the debt?

Mark Yes, if the corporation has any non-shareholder debt that was canceled, was forgiven, or had the terms modified so as to reduce the principal amount of the debt. If so, enter the amount of principal reduction. Mark No, if not.

Item 13

During the tax year, was a qualified subchapter S subsidiary election terminated or revoked?

Mark Yes, if a qualified subchapter S subsidiary election terminated or revoked during the tax year. If so, see Regulations section 1.1361-5 for additional information. Mark No, if not.

Item 14a

Did the corporation make any payments in 2020 that would require it to file Form(s) 1099?

Mark Yes, if the corporation made payments in 2020 that require filing Form 1099. Mark No, if not.

Item 14b

If “Yes,” did the corporation file or will it file required Form(s) 1099?

If you marked Yes on Item 14 — mark Yes, if the corporation filed or will file Form 1099. Mark No, if not.

Item 15

Is the corporation attaching Form 8996 to certify as a Qualified Opportunity Fund?

Mark Yes, if the corporation will attach Form 8996, Qualified Opportunity Fund, to certify as a Qualified Opportunity Fund. If so, enter the amount from Form 8996, line 15. Mark No, if not.

SCHEDULE K. SHAREHOLDERS’ PRO RATA SHARE ITEMS

All corporations must complete Schedule K, a summary schedule of all shareholders' shares of the corporation's income, deductions, credits, etc.

INCOME (LOSS)

Line 1

Enter the ordinary business income (loss) located on page 1, line 21. Do not include rental activity income (loss) or portfolio income (loss). Enter the income (loss) without reference to the shareholders’ basis in the stock of the corporation and any indebtedness of the corporation to the shareholders (section 1366(d)), At-risk and Passive activity limitations.

Line 2

Enter the net rental real estate income (loss) from Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation, and attach it to Form 1120-S.

Line 3a

Enter the gross income from rental activities other than those reported on Form 8825. Include the gain (loss) from line 17 of Form 4797 that is attributable to the sale, exchange, or involuntary conversion of an asset used in a rental activity other than a rental real estate activity.

Line 3b

Enter the deductible expenses of the activity. Attach a statement of these expenses to Form 1120-S.

Line 3c

Enter the net income (loss).

Line 4

Enter the taxable portfolio interest.

Line 5a

Enter the taxable ordinary dividends.

Line 5b

Enter the taxable qualified dividends.

Note: Do not include ordinary dividends or qualified dividends received from a foreign corporation to the extent that they are attributable to PTEP in annual PTEP accounts of the S corporation for the foreign corporation.

Line 6

Enter the royalties received by the corporation.

Line 7

Enter the gain (loss) that is portfolio income (loss) from Schedule D (Form 1120-S), line 7.

Line 8a

Enter the gain or loss that is portfolio income (loss) from Schedule D (Form 1120-S), line 15.

Line 8b

Enter the collectibles that are (28%) gain (loss).

Line 8c

Enter the unrecaptured section 1250 gain and report separately on an attached statement to Form 1120-S.

Line 9

Enter the net section 1231 gain (loss) from Form 4797, line 7. Do not include net gain or loss from involuntary conversions due to casualty or theft.

Line 10

Enter other income (loss).

Type

Identify the type of income. If there is more than one type of income, attach a statement to Form 1120-S that separately identifies each type and amount of income.

DEDUCTIONS

Line 11

Enter the amount of Section 179 deduction. Attach Form 4562, Depreciation and Amortization.

Line 12a

Enter charitable contributions made during the tax year.

Line 12b

Enter the interest properly allocable to debt on property held for investment purposes.

Line 12c

Enter the qualified expenditures paid or incurred during the tax year for which a shareholder may make an election under section 59(e). Enter this amount for all shareholders whether or not any shareholder makes an election under section 59(e).

Type

Enter the type of expenditures claimed on line 12c.

Line 12d

Enter deductions not included on line 11, 12a, 12b, 12c, or 14p.

Type

Enter the type of deduction. Attach a statement to Form 1120-S if there is more than one type of deduction.

CREDITS

Do not attach Form 3800, General Business Credit, to Form 1120-S.

Line 13a

Enter the credit reported to the corporation in box 15 of Schedule K-1 (Form 1065, U.S. Return of Partnership Income) using code A or code C, if the corporation invested in a partnership applying to the provisions of section 42(j)(5).

Line 13b

Enter any low-income housing credit not reported on line 13a. It includes any credit reported to the corporation in box 15 of Schedule K-1 (Form 1065) using code B or code D.

Line 13c

Enter the total qualified rehabilitation expenditures related to rental real estate activities of the corporation.

Line 13d

Enter any other credit (other than credits reported on lines 13a through 13c) related to rental real estate activities.

Type

Enter the type of credit. If there is more than one type of credit, attach a statement to Form 1120-S that identifies the type and amount for each credit.

Line 13e

Enter any other credit (other than credits reported on lines 13a through 13d) related to rental activities.

Type

Enter the type of credit. If there is more than one type of credit, attach a statement to Form 1120-S that identifies the type and amount for each credit.

Line 13f

Enter the biofuel producer credit attributable to the trade or business activities. If the credit is attributable to rental activities, enter the amount on line 13d or 13e.

Line 13g

Enter the other credit, except credits or expenditures shown or listed for lines 13a through 13f or the credit for federal tax paid on fuels (which is reported on line 23c of page 1).

Type

Enter the type of credit. If there is more than one type of credit, attach a statement to Form 1120-S that separately identifies each type and amount of credit for the following categories.

FOREIGN TRANSACTIONS

REMINDER

Complete Line 14b if a shareholder may need this information to figure a foreign tax credit.

Complete Lines 14a and 14c through 14r if the corporation has foreign income, deductions, or losses, or has paid or accrued foreign taxes.

Line 14a

Enter the name of the foreign country or U.S. possession whence the corporation had income or paid or accrued taxes.

Enter "See attached" if the corporation had income from, or paid or accrued taxes to, more than one foreign country or U.S. possession. Attach a statement for each country for lines 14a through 14r.

Line 14b

Enter the corporation's gross income from all sources.

Line 14c

Enter the total gross income of the corporation that is required to be sourced at the shareholder level. Include the income from the sale of most personal property, other than inventory, depreciable property, and certain intangible property.

Line 14d-14h. Foreign Gross Income Sourced at Corporate Level

Separately report gross income from sources outside the United States by category of income as follows.

Line 14

Reserved for future use.

Line 14e

Foreign branch category source income.

Line 14f

Passive category foreign source income.

Line 14g

General category foreign source income. All foreign income sourced at the corporate level that isn't reported on lines 14d, 14e, 14f and 14h must be included.

Line 14h

Attach a statement showing the amount of foreign source income included in section 901(j) income.

Lines 14i–14j. Deductions Allocated and Apportioned at Shareholder Level

Line 14i

Enter the corporation's total interest expense. Don't include the interest directly allocable under Temporary Regulations section 1.861-10T to income from a specific property.

Line 14j

Enter the total of all other deductions or losses that are required to be allocated at the shareholder level.

Lines 14k–14o. Deductions Allocated and Apportioned at Corporate Level to Foreign Source Income

Line 14k

Reserved for future use.

Line 14l

Enter corporate deductions that are apportioned at the corporate level to the foreign branch category.

Line 14m

Enter corporate deductions that are apportioned at the corporate level to the passive category.

Line 14n

Enter corporate deductions that are apportioned at the corporate level to the general category.

Line 14o

Enter corporate deductions that are apportioned at the corporate level to other foreign source income.

Line 14p

Enter in U.S. dollars the total foreign taxes that were paid or accrued according to the corporation's method of accounting for such taxes.

Line 14q

Enter the total reduction in taxes available for credit. Attach a statement showing the reductions for:

Attach a statement showing the reductions for:

• Taxes on foreign mineral income (section 901(e));
• Taxes on foreign oil and gas extraction income and foreign oil-related income (section 907(a));
• Taxes attributable to boycott operations (section 908);
• Failure to timely file (or furnish all of the information required on) Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, and Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships;
• Foreign income taxes paid or accrued during the current tax year that has been suspended under section 909; and
• Any other items (specify).

Line 14r

Enter other foreign tax information and attach a statement for each. However, you may only attach a statement if the corporation and its shareholders have elected to be treated as an entity for purposes of section 951A under Notice 2020-69. If no election has been made under the Notice, see instructions for line 17d, code AD.

Page 4

ALTERNATIVE MINIMUM TAX (AMT) ITEMS

Shareholders must complete Lines 15a to 15f.

Line 15a

Enter the post-1986 depreciation adjustment based only on tangible property placed in service after 1986 (and tangible property placed in service after July 31, 1986, and before 1987, for which the corporation elected to use the Modified Accelerated Cost Recovery System (MACRS)).

Line 15b

Subtract the regular tax gain (loss) and the AMT gain (loss). If the AMT gain is less than the regular tax gain, or the AMT loss is more than the regular tax loss, or there is an AMT loss and a regular tax gain, enter the difference as a negative amount.

Line 15c

Subtract the regular tax and AMT deduction. If the AMT deduction is greater, enter the difference as a negative amount.

Line 15d

Enter the total amount of gross income from all oil, gas, and geothermal properties received or accrued during the tax year and included on page 1, Form 1120-S.

Line 15e

Enter any deductions allowed for the AMT that are allocable to oil, gas, and geothermal properties.

Line 15f

Attach a statement to Form 1120-S and Schedule K-1 that shows other items not shown on lines 15a through 15e.

ITEMS AFFECTING SHAREHOLDER BASIS

Line 16a

Enter the tax-exempt interest income, including any exempt-interest dividends received from a mutual fund or other regulated investment company.

Line 16b

Enter all income of the corporation exempt from tax other than tax-exempt interest.

Line 16c

Enter the nondeductible expenses paid or incurred by the corporation.

Line 16d

Enter the total distributions made to each shareholder other than dividends reported on line 17c of Schedule K. Shareholder's pro-rata share of any amounts included in interest income with respect to new clean renewable energy, qualified energy conservation, qualified zone academy (for bonds issued after October 3, 2008), qualified school construction, or build America bonds must be included.

Attach statement if property other than cash was distributed to furnish the date the property was acquired and distributed. Also to provide the property's FMV on the date of distribution and the corporation's basis in the property.

Line 16e

Enter any repayments made to shareholders during the current tax year.

OTHER INFORMATION

Lines 17a and 17b. Investment Income and Expenses

Line 17a

Enter the investment income included on lines 4, 5a, 6, and 10 of Schedule K. Do not include other portfolio gains or losses.

Line 17b

Enter the investment expense included on line 12d of Schedule K.

Line 17c

Enter total dividends paid to shareholders from accumulated earnings and profits.

Line 17d

Other items and amounts.

RECONCILIATION

Line 18

Add the amounts on lines 1 through 10 in the far right column. From the result, subtract the sum of the amounts on lines 11 through 12d and 14p.

SCHEDULE L. BALANCE SHEETS PER BOOKS

Balance sheets should agree with the corporation's books and records. If you answered "Yes" to question 11 on Schedule B, you are not required to complete Schedule L.

Note: Include total assets reported on Schedule L, line 15, column (d), on page 1, item F.

Assets

Line 1

Enter the cash amount at the beginning and end of the tax year.

Line 2a

Enter the number of trade notes and accounts receivable at the beginning and end of the tax year.

Enter the number of trade notes and accounts receivable at the beginning and end of the tax year.

Line 2b

Enter the amount of less allowance for bad debts at the beginning and end of the tax year.

Line 3

Enter the amount for inventories at the beginning and end of the tax year.

Line 4

Enter the U.S. government obligations at the beginning and end of the tax year.

Line 5

Enter the Tax-exempt securities at the beginning and end of the tax year.

Include the state and local government obligations, the interest on which is excludable from gross income under section 103(a), and the stock in a mutual fund or other regulated investment company that distributed exempt-interest dividends during the tax year of the corporation.

Line 6

Enter other current assets at the beginning and end of the tax year and attach statements.

Line 7

Enter the loans to shareholders at the beginning and end of the tax year.

Line 8

Enter the mortgage and real estate loans at the beginning and end of the tax year.

Line 9

Enter the amount for other investments at the beginning and end of the tax year. Attach a statement.

Line 10a

Enter amounts for buildings and other depreciable assets at the beginning and end of the tax year.

Line 10b

Enter amounts for less accumulated depreciation at the beginning and end of the tax year.

Line 11a

Enter the amount for depletable assets at the beginning and end of the tax year.

Line 11b

Enter the amount for less accumulated depletion at the beginning and end of the tax year.

Line 12

Enter the amount for land, net of any amortization, at the beginning and end of the tax year.

Line 13a

Enter the amount for amortizable intangible assets at the beginning and end of the tax year.

Line 13b

Enter the amount for less accumulated amortization at the beginning and end of the tax year.

Line 14

Enter the amount for other assets at the beginning and end of the tax year. Attach statement.

Line 15

Enter the total assets at the beginning and end of the tax year.

Liabilities and Shareholders’ Equity

Line 16

Enter the amount for accounts payable at the beginning and end of the tax year.

Line 17

Enter the amount for mortgages, notes, bonds payable in less than 1 year at the beginning and end of the tax year.

Line 18

Enter the amount for other current liabilities at the beginning and end of the tax year. Attach statement.

Line 19

Enter the amount for loans from shareholders at the beginning and end of the tax year.

Line 20

Enter the amount for mortgages, notes, bonds payable in 1 year or more at the beginning and end of the tax year.

Line 21

Enter the amount for other liabilities at the beginning and end of the tax year. Attach statement.

Line 22

Enter the amount for capital stock at the beginning and end of the tax year.

Line 23

Enter the amount for additional paid-in capital at the beginning and end of the tax year.

Line 24

Enter the amount for retained earnings at the beginning and end of the tax year.

Line 25

Enter the amount for adjustments to shareholders’ equity at the beginning and end of the tax year. Attach statement.

Line 26

Enter the amount for less cost of treasury stock at the beginning and end of the tax year.

Line 27

Enter the total liabilities and shareholders’ equity at the beginning and end of the tax year.

Page 5

SCHEDULE M-1. RECONCILIATION OF INCOME (LOSS) PER BOOKS WITH INCOME (LOSS) PER RETURN

REMINDER

• If you answered "Yes" to question 11 on Schedule B, Schedule M-1 isn't required.
• File Schedule M-3 (Form 1120-S) instead of Schedule M-1 for corporations with total assets of $10 million or more on the last day of the tax year.
• A corporation filing Form 1120-S that isn't required to file Schedule M-3 may voluntarily file Schedule M-3 instead of Schedule M-1.
• For 2020, corporations that are required to file Schedule M-3 and have less than $50 million total assets at the end of the tax year or aren't required to file Schedule M-3 and voluntarily file Schedule M-3, must either complete Schedule M-3 entirely or complete it through Part I, and complete Form 1120-S, Schedule M-1, instead of completing Parts II and III of Schedule M-3. If the corporation chooses to complete Schedule M-1 instead of completing Parts II and III of Schedule M-3, line 1 of Schedule M-1 must equal line 11 of Part I of Schedule M-3.

Line 1

Enter the net income (loss) per book.

Line 2

Enter the income included on Schedule K, lines 1, 2, 3c, 4, 5a, 6, 7, 8a, 9, and 10 not recorded on the books this year. Describe each item of income. If necessary, attach a statement.

Line 3a and 3b

Expenses recorded on books this year not included on Schedule K lines 1 through 12 and 14p.

Describe each item of income. If necessary, attach a statement.

Line 3a

Enter the depreciation.

Line 3b

Enter the expenses for travel and entertainment.

Line 4

Add lines 1 through 3.

Line 5

Enter the income recorded on books this year not included on Schedule K, lines 1 through 10.

Enter the tax-exempt interest.

Line 6

Enter the deductions included on Schedule K, lines 1 through 12 and 14p, not charged against book income this year.

Enter the amount for depreciation.

Line 7

Add lines 5 and 6.

Line 8

Enter the income (loss) (Schedule K, line 18). Subtract line 7 from line 4.

SCHEDULE M-2. ANALYSIS OF ACCUMULATED ADJUSTMENTS ACCOUNT, SHAREHOLDERS’ UNDISTRIBUTED TAXABLE INCOME PREVIOUSLY TAXED, ACCUMULATED EARNINGS AND PROFITS, AND OTHER ADJUSTMENTS ACCOUNT

Visit the IRS official website for more information.

(a) Accumulated adjustments account

The accumulated adjustments account (AAA) is an account of the S corporation that generally reflects the accumulated undistributed net income of the corporation for the corporation's post-1982 years.

(b) Shareholders' Undistributed Taxable Income Previously Taxed

The shareholders' undistributed taxable income previously taxed account, also called previously taxed earnings and profits (PTEP), is maintained only if the corporation had a balance in this account at the start of its 2020 tax year.

(c) Accumulated Earnings and Profits

If the corporation was a C corporation in a prior year, or if it engaged in a tax-free reorganization with a C corporation, enter the amount of any AE&P at the close of its 2019 tax year on line 1 in column (c).

(d) Other Adjustments Account

The other adjustment account is adjusted for tax-exempt income and federal taxes attributable to a C corporation tax year. After these adjustments are made, the account is reduced for any distributions made during the year.

Line 1

Enter the balance at the beginning of the tax year of a, b, c, and d.

Line 2

Enter the ordinary income from page 1, line 21, of a.

Line 3

Enter the other additions of a and d.

Line 4

Enter the loss from page 1, line 21, of a.

Line 5

Enter other reductions of a and d.

Line 6

Add lines 1 through 5 of a, b, c, and d.

Line 7

Enter the distributions of a, b, c, and d.

Line 8

Enter the balance at the end of the tax year. Subtract line 7 from line 6.

Frequently Asked Questions About Form 1120-S

How to file form 1120-S?

If you are qualified to mail your Form 1120-S, use the address provided by the IRS on their official website. You may also use private delivery services (PDS) to meet the "timely mailing as timely filing" rule for tax returns. However, PDS cannot deliver items to P.O. boxes. Hence, use the U.S. Postal Service to mail Form 1120-S to the IRS P.O. box address.

For more information, visit the IRS official website.

What is an S Corporation?

S Corporation, also known as S corp, Small business corporation, or Subchapter S corporation, is a business that passes corporate income, losses, deductions, and credit through shareholders for federal tax purposes.

Unlike other corporations, S corp moves the tax duties from the business to the owners. It benefits them a limited liability and relief from double taxation.

S corp has limited liability, keeping the personal assets of investors and owners off-limits. It limits the extent of an economic loss to assets invested in the company. Moreover, the S corp is exempt from paying tax at the corporate level as shareholders pay their individual income tax.

How to be an S Corporation?

An entity or organization shall file Articles of Incorporation with the Secretary of State to register as a corporation. This process is called “incorporation”.

Once your business is incorporated, all shareholders must sign and submit Form 2553, Election by a Small Business Corporation, to confer the S Corporation designation.

Hence, you must file Form 2553 to file Form 1120-S.

What is the purpose of Form 1120-S?

Form 1120-S is used to report the income, gains, losses, deductions, credits, etc., of a domestic corporation or other entity for any tax year covered by an election to be an S corporation.

What is the difference between Form 1120 and 1120S?

Form 1120, U.S. Corporation Income Tax Return, is the primary income tax return filed by corporations in the United States. The main difference between Form 1120 and Form 1120-S is that Form 1120-S is specifically filed by an S Corporation, a special type of corporation to own small businesses and be taxed differently than other corporations.

What is an S Corporation?

An S Corporation is a U.S. corporation that has elected to pass corporate income, losses, deductions, and credit through to its shareholders for federal tax purposes. Shareholders of an S Corporation are taxed on the corporation's profits as personal income.

An S Corporation can have no more than 100 shareholders, and only certain types of shareholders can be counted for this limit.

What is the difference between an S Corporation and a C Corporation?

An S Corporation is also often called a "flow-through" entity as its profits are passed to its shareholders, who pay taxes on them on their own income tax returns. The shareholders are not taxed again when they receive dividend distributions from the S Corporation in addition to their salaries.

A C corporation is taxed on its profits, but the income also pays the tax. Profits are not paid out to shareholders; instead, they stay within the corporation and are taxed again when earned by the corporation.

Does an S Corporation file a tax return?

Because an S Corporation is a flow-through entity, it does not pay income tax at the corporate level. Instead, its shareholders report and pay tax on their pro-rata shares of all taxable items, including earnings and gains.

An S Corporation does not file its own federal tax return. As such, Form 1120-S is used to report the company's income and expenses for purposes of shareholder taxes on their personal returns.

When is the deadline to file Form 1120S?

The deadline for S Corporations to file Form 1120-S is March 15, with extensions allowed, up until the 15th day of the third month following the end of their tax year.

Is Form 1120-S due on the same date as Form 1040?

No. Form 1120-S must be filed by the 15th day of the third month after the end of their tax year. It is usually March 15. However, if an S Corporation has started late in the year, an extension will need to be filed for a later deadline.

On the other hand, the deadline to file Form 1040, U.S. Individual Income Tax Return, is April 15.

What happens if Form 1120S is filed with the wrong EIN?

Filing Form 1120-S with an incorrect or missing Employer Identification Number (EIN) may cause delays in processing the return and affect the timely filing of shareholder tax returns.

Are there consequences for filing Form 1120S late?

Delinquent S Corporation returns are subject to a late filing penalty of up to $195 per month, or 5% of the unpaid tax — whichever is greater.

How is Form 1120-S different from Form 1040?

The purpose of Form 1120-S is to report an S Corporation's income and expenses on its shareholders' personal tax returns. There are many differences between Form 1120-S and Form 1040, including the information reported on each.

The main difference is that Form 1120-S reports an S Corporation's income and expenses for the benefit of its shareholders, while Form 1040 reports an individual taxpayer's income.

Where do I file my Form 1120S?

The mailing address for your Form 1120-S depends on your principal place of business and total assets.

If your place of business is in Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, or Wisconsin, and your total asset at the end of the tax year is less than $10 million, and you did not file Schedule M-3 (Form 1120-S), Net Income (Loss) Reconciliation for S Corporations With Total Assets of $10 Million or More, send your Form 1120-S to:

Department of the Treasury

Internal Revenue Service Center

Kansas City, MO 64999-0013

If your place of business is located in any of the states above and your total asset at the end of the tax year is more or less than $10 million, and you filed Schedule M-3 (Form 1120-S, send your Form 1120-S to:

Department of the Treasury

Internal Revenue Service Center

Ogden, UT 84201-0013

You may also use the mailing address above if your place of business is in Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, or Wyoming.

If your place of business is in a foreign country or U.S. possession, send your Form 1120-S to:

Internal Revenue Service Center

P.O. Box 409101

Ogden, UT 84409

How do I file Form 1120S without exercise?

On the first page of Form 1120-S, check the box that says "Check if S election termination or revocation." It will let you submit your tax form without having to exercise any shares.

Do not use this option if you need to submit a change request for your business, such as buying back more than 25% of your business.

How do I file Form 1120S if I don't have a TIN?

If you have no Taxpayer Identification Number (TIN), such as an Employer Identification Number (EIN), you may file Form SS-4, Application for Employer Identification Number, with the Internal Revenue Service.

Form SS-4 is an Internal Revenue Service form used to apply for an Employer Identification Number.

What if my business makes no money? Do I still need to file Form 1120S?

Yes, businesses with losses or no income still need to file Form 1120-S with the Internal Revenue Service.

As a business owner, you are required by law to file your company's financial information with the Internal Revenue Service. If any shareholders receive distributions from an S Corporation during the tax year, they are responsible for reporting their share of profit or loss on their personal tax return.

Is Form 1120S an extension for the tax year?

No, Form 1120-S is not an extension of tax return filing.

To obtain a six-month extension to file Form 1120-S, you must file Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns.

What happens if you don't file Form 1120-S?

You may be fined for not filing Form 1120-S, beginning the day after the due date. If you fail to file a return for two consecutive years, you may lose your S Corporation status.

Can you electronically file Form 1120S?

Yes, Form 1120-S can be filed electronically with the Internal Revenue Service.

How do you file Form 1120S if there is pending litigation?

If the S Corporation has pending litigation, any shareholder may request an extension for filing Form 1120-S using Form 7004.

How does filing Form 1120S affect my personal taxes?

If you operate as an S Corporation and file Form 1120-S with the Internal Revenue Service, your personal federal tax return filed on Form 1040 will not be affected by it.

How do you file Form 1120S if there are multiple owners but only one owner files the tax return?

If only one person is responsible for filing Form 1120-S, that individual must include all shareholders' names and addresses on the completed Form 1120-S.

Can I retroactively file as an S Corp?

You cannot file Form 1120-S retroactively in a year that you should have been filing as an S Corporation.

If you previously filed as a sole proprietorship, partnership, or C Corporation and wish to change your taxable status to an S Corporation, you must file Form 2553, Election by a Small Business Corporation.

In order to become an S Corporation, a business entity must file Form 2553 with the Internal Revenue Service within two months and 15 days after the date the articles of incorporation are filed.

How many years can a business go without filing Form 1120S?

A business can go up to three years without filing Form 1120-S. After the third year, you must file Form 1120-S for each year, even if there is no income or loss for that particular year.

Do I need to file Form 1120S for an S Corporation with no activity?

Yes, you need to file Form 1120-S even if your business has no activity. If you own an S Corporation, you are required by law to file your company's financial information with the Internal Revenue Service.

Does an S Corporation pay quarterly taxes?

Yes, an S Corporation may pay quarterly taxes if its total tax responsibility for the year is over $500.

What are some common errors on Form 1120-S?

Typical errors made on Form 1120-S include entering incorrect amounts, failing to attach schedules, and not listing all of your company's shareholders.

Are S Corporations considered self-employed?

No, S Corporations are not considered self-employed or sole proprietorships, even if they have one owner.

A self-employed individual is one who prepares Form 1040 as a sole proprietor or independent contractor. The sole owner of an S Corporation is typically considered a shareholder and, therefore, this type of business entity is not a self-employed individual.

Can you file Form 1120S if your business is based outside the United States?

No, Form 1120-S can only be filed by businesses located within the United States.

Before you file Form 1120-S, your business must be incorporated, and all shareholders must complete Form 2553.

You cannot file Form 2553 if you are not a U.S. citizen. Therefore, Form 1120-S must be filed by businesses operating in the United States.

Moreover, you can file Form 1120-S if:

• you have only one class of stock outstanding;
• your business has no more than 100 shareholders; and
• you are a U.S. citizen or resident.

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