Form 1120-S and its Fundamentality for S-Corporations

Form 1120-S is used to record S-corporation income, deductions, and distributions to the IRS. Our team of experts knows the special tax concerns that apply to S-corporations and assures proper reporting to keep you in compliance with tax requirements. 

Significance of the form

Form 1120-S records an S corporation’s income, deductions, gains, losses, credits, and other important information. The form assists in determining the S corporation’s tax obligation and gives information on income distribution to shareholders. 

A checklist to have your form filing process smooth!

You will need the following information to submit Form 1120-S for your S-corporation: 
  • Basic Business Information: Provide your S-corporation’s legal name, address, and Employer Identification Number (EIN).
  • Shareholder Information: Include the names, addresses, and ownership percentages of all S-corporation shareholders. Include any changes in ownership that occurred during the tax year.
  • Income and Expenses: Summarise the corporation’s income and expenses for the fiscal year. This comprises sales, services, and other revenue, as well as deductible expenses including wages, rent, supplies, and running costs.
  • Balance Sheet Information: Create a balance sheet that illustrates the S-corporation’s assets, liabilities, and shareholder’s equity at the beginning and conclusion of the tax year.
  • Shareholder Distributions: Provide information about any distributions or dividends made to shareholders throughout the tax year. This data is required to compute the taxable income allotted to each shareholder.
  • Tax Payments and Credits: Include any projected tax payments made during the year, as well as any relevant tax credits or deductions. 

Having a look at the additional paperwork

You may need to provide several attachments and schedules with Form 1120-S, depending on the circumstances. Schedule K-1 (Shareholder’s Share of Income, Deductions, Credits, etc.), Schedule B (Additional Information for Schedule K-1), Schedule L (Balance Sheets per Books), and Schedule M-2 (Analysis of Accumulated Earnings and Profits) are some frequent attachments.

Do not forget the deadlines!

Unless you’ve requested an extension, the deadline for submitting Form 1120S is March 15. Form 7004 can be used to request an extension until March 15. When you successfully seek an extension, your filing deadline is pushed out to September 15, but you must still pay an estimate of your tax amount by the original deadline.
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Included Topics
  • Significance of the form
  • A checklist to have your form filing process smooth!
  • Having a look at the additional paperwork
  • Do not forget the deadlines!

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