Form 1120-S: Basic info you must have as an S Corp Owner

February 24, 2023by MAS Editorial Team0

If you are residing in the USA or are running your company, then you must have heard about Form 1120. However, what becomes tricky here is the fact that there are various types of 1120. 1120-C, 1120-F, 1120-H, 1120-L, 1120-POL, and 1120-S are some of the examples.

In this blog, we will be talking about Form 1120-S and facilitate you in the filing of the form.


Meaning of Form 1120-S

Form 1120-S is used for filing the US Income Tax Return of an S-Corporation. Corporations which elect to pass their organization’s income, losses, deductions, or credits through their various shareholders are understood as S Corporations.

Form 1120-S reports the various income, gains, losses, credits, and deductions to make it easier for the IRS to track the organizational income as well as the personal tax dues of the shareholders.


Use of Form 1120-S

All the S corporations in the US must file this form to file their Federal Income Tax Returns. Even the LLCs who opted to be taxed as an s-corp files Form 1120S.

As mentioned earlier, Form 1120-S basically reports the taxable income or the tax deductibles. Moreover, it fulfills another purpose for the IRS as well. Form 1120-S notifies the IRS of the percentage of company shares held by each shareholder. As for the organization , the tax liability basically gets shifted to the owners from the organizational liability.


What information needs to be provided in the form?

In most cases, it is not the tax but tax preparation that overwhelms corporations. Therefore, here are a few things you should have ready.

  1. The incorporation date of your business
  2. Your products and services enlisted together
  3. The business activity code you use
  4. Your company’s EIN
  5. The date proof on which you elected the S Corporation status. (If your organization follows and operates as per the calendar-year, then the date is usually January 1. If you operate on the fiscal-year basis, then the first date of that will be the election date.)
  6. The P&L statement as well as the Balance Sheet. It is easy to create them on your own or you can take the help of an expert.
  7. The accounting method you use. You have to clarify whether you use a cash accounting method or an accrual accounting method.
  8. You must also report any payments made to independent contractors which are reportable in form 1099 form. As in that case, attaching Form 1099 also becomes important.


How to file it?

Honestly, even for experts it gets tricky sometimes to fill the Form 1120-S. The reason being there are various schedules that might be required to be attached along with the Form 1120-S. Therefore, gather the information required, and consult a taxation expert.


The Deadline Date

The deadline for filing Form 1120-S is the 15th day of the third month from the tax year ending. If we calculate it, then we get March 15 as the date. However, this may differ in case of public holidays or weekdays coinciding with the date. In such cases, the deadline gets shifted to the next working day.

Also, go through the common and major tax forms in the US which are used to file tax returns. It can help you or others you know too.

ten by – Priyanka Rampal


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