Tax Form for S Corp: Everything You Need to Know
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. 3 min read
2. Overview of S Corp Taxation
3. Federal Income Tax Forms
4. Schedule B for Form 1120S
5. Schedule K for Form 1120S
6. Schedule K-1 for Form1120S
7. State Income Tax Forms
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.
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
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.
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.
In addition to these, there may be other forms that your S corporation or shareholders of your S corporation will be required to file. If you need help further understanding a tax form for S corp, you can post your legal needon UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.