Last Updated: By TRUiC Team
Form 1120S, also written as Form 1120-S, is the tax form used by businesses registered as S corporations (S corps) to file their US federal tax return to report on their income, deductions, and credits for the year. The Internal Revenue Service (IRS) requires all S corps to file Form 1120S so, if you’re thinking about starting an S corp or you recently did, keep reading to learn more about:
- What Is Form 1120S?
- Form 1120S vs. Form 1120
- Do I Need to File Form 1120S?
- How to File Form 1120S
S corp taxes can be complicated so we strongly recommend consulting with an accountant or other tax professional for help and advice on filing your Form 1120S and other S corp taxes.
What Is Form 1120S?
Form 1120S is the tax form S corporations must use to disclose their yearly financial activities to the IRS. Any corporation or LLC that elects S corp status by filing IRS Form 2553 must file Form 1120S — essentially, an S corps tax return.
Although S corporations are pass-through entities and not subject to corporate income taxes, they must use Form 1120S as an informational return to report their income, deductions, credits, other taxes and payments, and any dividends they paid to their shareholders.
S corps must create a Schedule K-1 for each of their shareholders and file them along with Form 1120S. Schedule K-1 details the percentage of the company that a shareholder owns as well as the company’s profits and losses for the year allocated to that shareholder.
To learn more about Form 1120S, read the IRS’s guidance on the IRS website. For help completing your Form 1120S, schedule an appointment with an accountant. 1-800Accountant offers a free consultation so you can get started today.
You can download the most current version of Form 1120S from the IRS website.
Form 1120S vs. Form 1120
Form 1120S and Form 1120 are very similar and easy to confuse. S corps use Form 1120S to report their yearly financial information (i.e., income, deductions, credits, and tax payments) to the IRS as well as how they allocated company profits or losses to their shareholders.
C corporations (C corps) use Form 1120 to file and pay their annual federal tax returns. C corps aren’t pass-through entities like S corps so they must complete a different tax form (Form 1120) and pay federal income tax on their business profits.
Do I Need to File Form 1120S?
If you have an S corporation, you must file Form 1120S. This includes both LLCs and corporations that elected S corp status as well as single-owner S corps.
According to the IRS, “A corporation or other entity must file Form 1120S if (a) it elected to be an S corporation by filing Form 2553, (b) the IRS accepted the election, and (c) the election remains in effect.”
If you have an S corp and its S corp status remains in effect, you must file Form 1120S — even if your S corp didn’t participate in any financial activities during the year.
Failure to file Form 1120S puts you at risk of losing your S corp status and may subject your company to additional fines and penalties.
How to File Form 1120S
S corps must take several steps to complete and file Form 1120S. These include gathering the necessary information, completing Form 1120S, completing all of the necessary accompanying forms and schedules, and filing Form 1120S and all of its required attachments with the IRS.
What You Need to Fill Out Form 1120S
First, you must gather all the information you'll need to complete Form 1120S. This includes details about your company like when it was incorporated, when it elected S corp status, and information on its financial activities. Specifically, you’ll need your S corp’s:
- Effective Date for Its S Corp Election
- Business Activity Code Number
- Employer Identification Number (EIN)
- Date of Incorporation
- P&L Statements and Balance Sheet
- Payments to Independent Contractors
- Employment Tax Returns (Forms 940 and 941)
Keeping track of your company’s finances can be tricky. We recommend using an accounting service, such as FreshBooks, to help keep all of your business’s information in one, easy-to-access place.
Other Forms and Schedules You May Need to File With Form 1120S
S corporations may need to file a number of additional IRS Forms, schedules, and attachments with their Form 1120S. For instance, all S corps must file at least one or more Schedule K-1. Some of these accompanying forms, schedules, and attachments might include:
Schedule B-1 (Form 1120S): Information on Certain Shareholders of an S Corporation
An S corp must file Schedule B-1 (Form 1120S) when any of its shareholders is a disregarded entity, a trust, an estate, or a nominee or similar person at any time during the tax year.
Schedule D (Form 1120S): Capital Gains and Losses and Built-in Gains
S corps need to file Schedule D (Form 1120S) to report on their capital gains and losses, sales or exchanges of capital assets, and gains on distributions to shareholders of appreciated capital assets.
Schedule K-1 (Form 1120S): Shareholder’s Share of Income, Deductions, Credits, etc.
Schedule K-1 is the form used to report each shareholder’s allocation of an S corp’s income, deductions, and credits. An S corp must complete a Schedule K-1 for each of its shareholders and file all of them with its Form 1120S as part of its corporate income tax return.
Schedule M-3 (Form 1120S): Net Income (Loss) Reconciliation for S Corporations With Total Assets of $10 Million or More
S corps with total assets of $10 million or more must file Schedule M-3 along with their Form 1120S. This form reports an S corp’s worldwide vs. US assets and income, and then reconciles these to the total income (or loss) noted on Schedule K-1 of its Form 1120S.
Form 7004: Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns
S corporations can use Form 7004 to request additional time to file their Form 1120S.
Form 1099-MISC: Miscellaneous Income
Businesses that pay certain types of compensation (e.g., to independent contractors or for rents, prizes, and awards, etc.), must report these payments to the IRS and the payee, using Form 1099-MISC. If your S corporation uses any type of independent contractor or freelance labor, you must report payments to any individual or business that totals $600 or more in one year.
Form 940: Employer’s Annual Federal Unemployment Tax (FUTA) Return
The IRS requires all employers to pay federal unemployment tax via this form, and most states also require employers to file unemployment taxes of their own. File Form 940 to account for this.
Form 941: Employer’s Quarterly Federal Tax Return
All employers also must file Form 941 each quarter to report the income taxes and payroll taxes they withheld from their employees' earnings as well as their employer's share of Social Security and Medicare taxes.
Completing Form 1120S
Completing Form 1120S can seem complicated for the majority of business owners. This form may raise many questions for the average business owner, and they also might need to file numerous other IRS forms, schedules, and attachments.
If you choose to complete your S corp’s tax return yourself, the IRS provides instructions for completing Form 1120S.
Most S corps use an accountant or tax professional to complete their income tax returns in order to ensure they’re prepared and filed correctly.
Important Dates for Filing Form 1120S
S corporations must file Form 1120S by the 15th day of the third month following the end of their fiscal year. If an S corp follows the calendar year, this due date is usually March 15 — unless March 15 falls on a weekend or holiday.
For S corporations that want more time to file, they must file the extension request form and pay any anticipated taxes by the original due date of the return (usually March 15).
With an extension, the IRS grants an S corporation six additional months to file Form 1120S (usually due September 15).
Changes That Affect Form 1120S
US tax regulations continually evolve due to new legislation and laws. We recommend consulting with an accountant, attorney, or tax professional who’s familiar with the current tax laws and can advise you on how changes in tax law affect your business.