What to Know About Filing Form 1120-S for Your S Corp

Not all small businesses are alike, and neither are their taxes. For S corporations, the reporting of certain taxable activity is “passed through” to the company’s shareholders. But that doesn’t mean the Internal Revenue Service doesn’t need a record of it. So, where is all that information captured?  The answer is Form 1120-S.

What is IRS Form 1120-S?

IRS Form 1120-S is the tax form S corporations use to file a federal income tax return. This tax form informs the IRS of your total taxable earnings in a tax year. It’s used to determine an S corporation’s business income, gains, losses, tax credits, and deductions.

Who should fill out the 1120-S Tax Form?

Every S corporation should file the 1120-S tax form, including LLCs taxed as S corporations. Employees or shareholders of an S corporation don’t need to file this form. Earnings should be reported on their individual tax return. Employees will receive a W-2 form from the corporation, while shareholders will receive a Schedule K-1 (Form 1120-S).

If you want to elect S corporation status, you should file Form 2553 to transition your business to an S corporation either during the corporation’s first tax year for which you want to make the election or within the first 2.5 months following that first tax year. Once you elect treatment as an S corporation, you should file the 1120-S tax form each year for federal tax purposes.

Important reminder: This tax form closely resembles IRS Form 1120, typically filed by C Corporations. However, S Corporations should always file IRS Form 1120-S. Need a quick refresher on other business types? Explore our Business Entity 101 guide for more insights!

Looking for expert help as you consider which business entity is right for you? Block Advisors has business formation products and services to equip you with information to help you navigate this important step for your company.

What information is on Tax Form 1120-S?

Tax Form 1120-S requests the following information:

• Accounting method
• Balance sheet
• Business activity code
• Business stock information
• Date the business elected to be an S corporation
• Date the business was incorporated
• Employer Identification Number (EIN)
• Fixed assets
• Income statement
• Income tax payments
• Number of shareholder transaction listings/number of shareholders
• Number of 1099 contract workers and W-2 employees
• Total taxable income: Reported by assets, profits, losses, and deductions

Form 1120-S instructions

If you want to do your taxes on your own, we’ve outlined the instructions for Form 1120-S below. But if you’d rather get back to running your business, you can always let one of our small business certified tax pros take care of this paperwork.

Part I

This section has you complete basic identifying information for your business, like S Corp election effective date, business activity code, name, address, EIN, date incorporated, total assets, number of shareholders, etc. This section also has you provide the profit and loss information through income, deductions, and tax payments.

If you’re paper filing, you also need to sign Part I. If we file for you, your tax professional will also sign Part I.

Schedule B

1120-S has schedules within the form. The first is Schedule B. In this area, you’ll include the:

• Name of your corporation and EIN.
• Information on S Corp shareholders: Name, SSN/EIN, type of shareholder record, person responsible for reporting shareholder income, deductions, credits, and more from Schedule K-1.

Schedule K

The second schedule on the form is Schedule K, which summarizes income, tax deductions, and tax credits for your S corporation’s shareholders within the tax year.

Schedule L

This section determines your business’s balance sheet, including total assets and insurance liabilities.

• If you answered “Yes” to 11a and 11b on Schedule B, you don’t need to complete Schedule L.
• If you answered “No” to either or both questions, you must complete Schedule L.

Schedule M-1

Schedule M-1 is required when a business’s gross receipts or total assets at year-end are more than $250,000. This section helps you reconcile income or loss per book with your return.

If you fill out Schedule L, you should also complete Schedule M-1. This section helps reconcile what’s reported on your financial statements (books) to your corporate tax return.

Schedule M-2

The final section of the 1120-S is Schedule M-2, which is dedicated to reporting the accumulated adjustment accounts (AAA). Line 8 of this schedule tells you the corporation’s year-end AAA balance. This section is not always required.

Can you file the 1120-S online?

You can file 1120-S online using tax filing software for businesses. But if you don’t want to take the time to complete these forms, Block Advisors has your back. Take back the time it takes to complete complex tax forms. Let a certified small business tax pro help you.

Due date for Form 1120-S

The S Corp filing deadline is the 15th day of the third month after the end of your tax year. So, if your business’ tax year ends on December 31, your 1120-S due date is March 15 each year.  (Unless it falls on a weekend or holiday. Then it’s usually the next business day.)

When you need more time to get your return together, you can file for a corporate tax return extension using IRS Form 7004. The S Corp extension due date is September 15, and you can e-file IRS Form 7004. (The same goes for the deadline here—if it falls on a weekend or holiday, the due date is the next business day.)

If your company dissolves, you should file on the 15th day of the third month after shutting down.

More expert guidance on small business taxes

Remember—you don’t have to take on taxes all by yourself. Let us handle tax, bookkeeping, and payroll so you can get back to what you love. Make an appointment with a Block Advisors expert today!

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This article is for informational purposes only. The content may not constitute the most up-to-date information and should not be construed as legal advice.