Key Takeaways

  • The primary S corp form is IRS Form 1120-S, which reports income, deductions, and other key tax information but does not itself result in corporate-level taxation.
  • Schedule K-1 must be prepared and distributed to each shareholder, detailing their share of the S corp’s income, deductions, and credits.
  • Schedule B and Schedule K provide detailed reporting on ownership, income, credits, and other pass-through items.
  • Shareholders report income using Form 1040 and include their K-1 information on their individual returns.
  • Additional forms may apply, such as Form 941 (payroll), Form 940 (federal unemployment), and W-2/W-3 (employee wage reporting).
  • State tax filing requirements vary widely, and some states impose separate S corp-level taxes or franchise fees.
  • Filing deadlines, penalties, and extension options are crucial for compliance and avoiding costly IRS fines.

Tax Form for S Corp

Tax form for S corp refers to the tax documents that one may have to file if they are the owner of an S corp. These forms will pertain to both corporate and individual tax returns, because S corporations are something of a hybrid entity with characteristics of both corporations and partnerships.

Overview of S Corp Taxation

S corporations must file tax returns at the corporate level because they are corporations (being essentially C corporations with an S corporation tax status), even though the pass-through taxation that comes with the S corporation tax status means they do not actually have to pay taxes at the corporate level.

The pass-through taxation system means that the actual taxes required by the S corporation will be paid by the individual shareholders of the S corporation on their individual federal tax returns. This system of taxation may be more complicated than that of some other business entities, but many find the savings made through it to be worth the extra paperwork.

Federal Income Tax Forms

There are several different forms involved in filing federal taxes for an S corporation. These are:

  • Form 1120S.This form is filed by the S corporation itself, even though its taxes will be passed through to the shareholders. This is an informational form only and is used to give the IRS a view of the corporation’s expenses and earnings.
  • Schedule K-1 Form.This formis prepared by the S corporation and is used to record the losses or profits of each shareholder.
  • Form 1040.This is the standard individual tax return that shareholders must file.

Form 1120S and the Schedule K-1 form are both due two months and fifteen days after the first day of the calendar year, while Form 1040 is due on the standard tax day, which is in mid-April. If an S corporation cannot make its filing deadline, it can file for a six-month extension by submitting Form 7004 to the IRS.

Step-by-Step Guide to Completing Form 1120-S

Form 1120-S is the cornerstone of S corporation tax filing. Although the entity does not pay federal income tax, the IRS requires this return to report business activity. It includes sections for income, deductions, credits, and shareholder details. To properly complete the form:

  1. Enter basic information – business name, address, EIN, and date of incorporation.
  2. Complete income sections – report gross receipts, cost of goods sold, and other income sources.
  3. Record deductions – list expenses such as salaries, rent, advertising, depreciation, and benefits.
  4. Calculate ordinary business income – subtract total deductions from total income.
  5. Detail shareholder information – include each shareholder’s ownership percentage and financial share.

A well-prepared 1120-S helps the IRS verify pass-through income allocation and ensures shareholders’ returns match reported distributions.

Additional Required S Corp Forms

Beyond Form 1120-S and Schedule K-1, most S corporations must file additional forms to remain compliant:

  • Form 941 – Employer’s Quarterly Federal Tax Return: Reports payroll taxes withheld from employee wages.
  • Form 940 – Federal Unemployment Tax Return (FUTA): Filed annually to report unemployment tax obligations.
  • Form W-2 and Form W-3: Sent to employees and the Social Security Administration, detailing wages paid and taxes withheld.
  • Form 1099-NEC: Required if the corporation pays $600 or more to independent contractors.
  • Form 7004: Used to request an automatic six-month extension for filing Form 1120-S.

Failure to submit these forms on time can lead to steep IRS penalties and interest charges.

Schedule B for Form 1120S

Corporations that file Form 1120S will also have to fill out Schedule B of the form, which asks for information pertaining to:

  • Any stock the S corporation has in other corporations
  • Any ownership interest the corporation has in partnerships
  • The amount of the S corporation’s total receipts
  • The amount of the S corporation’s total assets

Schedule K for Form 1120S

Schedule K is another schedule attached to Form 1120S. It asks for a summary of deductions, income, credits, and any other items that have been passed through to the S corporation’s shareholders.

Schedule K-1 for Form1120S

This schedule (Form 1065) is submitted by the S corporation to its shareholders by the fifteenth day of the second month of the fiscal year. This schedule must also come with the Shareholder’s Instructions for Schedule K-1.

Every Schedule K-1 form is specific to the shareholder and provides information pertaining to that shareholder’s share of income from the S corporation for the previous year. Other information provided in this form can include:

  • Ordinary business income
  • Rental real estate income
  • Royalties
  • Dividends

The information provided in this schedule will be used by the shareholder to complete their own individual tax return.

Copies of these Schedule K-1s must be included in the S corporation’s tax return. They should not be mailed out until the S corporation has completed its Form 1120S.

Shareholder Responsibilities and Tax Reporting

Each shareholder’s Schedule K-1 reflects their share of the company’s income, deductions, and credits. Shareholders must:

  • Report their share of income, even if it was not distributed as cash.
  • Attach K-1 information to their Form 1040 individual return.
  • Pay taxes on pass-through income at their individual tax rate.

Additionally, shareholders may need to adjust their stock basis each year. Basis starts with the amount invested and is adjusted for annual income, losses, and distributions. Proper basis tracking helps avoid double taxation when shares are sold.

State Income Tax Forms

Although the federal government does not tax S corporations, some states may, or they may tax the S corporation based on a flat fee. States that assess taxes or flat fees will require your S corporation to file a separate tax return at the state level. Even if such is not the case, your S corporation will have to file an informational tax return.

Additionally, most states require unemployment taxes from S corporations. In order to pay these, a withholding tax account will need to be set up for your S corporation in the state you are filing so you can report on unemployment and pay the related taxes using the correct state forms. The Department of Revenue or equivalent state office will have more information on how taxes are assessed in your state.

State Filing Considerations and Deadlines

Each state has its own approach to S corporation taxation. Some states mirror federal pass-through treatment, while others:

  • Require separate state S corp forms or information returns.
  • Impose franchise taxes or minimum annual fees.
  • Require withholding on nonresident shareholders.

For example, California imposes a 1.5% franchise tax on net income, while New York requires S corporations to file Form CT-3-S. Always check with your state’s department of revenue for specific filing requirements and due dates.

Frequently Asked Questions

  1. What is the main S corp form required by the IRS?
    The primary S corp form is Form 1120-S, which reports income, deductions, and other tax-related information. While the S corp itself does not pay income tax, the IRS uses this form to verify pass-through reporting.
  2. When is Form 1120-S due?
    It’s due on the 15th day of the third month after the end of the tax year — typically March 15 for calendar-year corporations. Filing Form 7004 grants a six-month extension.
  3. Do S corps have to file payroll tax forms?
    Yes. If the S corp has employees, it must file Form 941, Form 940, and issue W-2s. These forms report and remit employment-related taxes.
  4. Are shareholders taxed on undistributed earnings?
    Yes. Shareholders must report their share of the S corp’s income even if it is not distributed as cash.
  5. Do all states require separate S corp filings?
    Not all. Some states automatically recognize the federal S election, while others require additional forms or impose entity-level taxes. Always verify state-specific rules before filing.

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