S Corporation Income Tax Return (Form 1120-S)

What is Form 1120-S?

Form 1120-S, officially known as the U.S. Income Tax Return for an S Corporation, is the tax form that S corporations use to report their income, deductions, and credits to the IRS. S corporations, which are pass-through entities, do not pay federal income tax at the corporate level. Instead, income, deductions, and credits are passed through to shareholders, who report these amounts on their individual tax returns. This allows S corporations to avoid the double taxation that typically applies to C corporations.

When is the Due Date?

The due date for filing Form 1120-S is typically March 15th of the year following the end of the corporation's tax year (for calendar-year S corporations). If March 15th falls on a weekend or holiday, the due date is the next business day. S corporations that require additional time may file for an extension, allowing them until September 15th to submit Form 1120-S. However, it's important to note that an extension to file is not an extension to pay any taxes owed, which must be estimated and paid by the original due date.

What Information Do You Need to Provide?

S Corporation Information

• Name: The legal name of the S corporation as registered with the state.

• Employer Identification Number (EIN): The corporation’s unique EIN assigned by the IRS.

• Principal Business Activity: The primary activity the S corporation engages in.

• Business Code Number: An industry code corresponding to the corporation's main business activities.

• Principal Business Address: The main office location of the S corporation.

Income Documentation

• Gross Receipts or Sales: Total income generated from business operations.

• Other Income Sources: Income not derived from sales, such as interest, dividends, or gains from asset sales.

• Cost of Goods Sold (COGS): If applicable, detailed COGS documentation related to inventory costs, labor, and materials.

Deductions and Expenses

• Operating Expenses: Typical business costs such as salaries, rent, utilities, and office supplies.

• Depreciation: Depreciation expenses for business assets like equipment and buildings (often reported on Form 4562).

• Travel and Meals: Documentation of business-related travel and meal expenses.

• Interest Payments: Interest paid on business loans.

• Other Deductions: Includes advertising, insurance, and employee benefits.

• Salaries and Other Compensation: Reporting of compensation paid to officers and employees.

Shareholder Information and Schedule K-1

• Schedule K-1 (Form 1120-S): Each shareholder receives this form, detailing their share of the S corporation's income, deductions, and credits, which they report on their individual tax returns.

• Allocation of Profits/Losses: Based on the shareholder agreement, each shareholder's share of income and deductions is calculated.

Tax Credits and Other Deductions

• Research and Development (R&D) Tax Credit: If applicable, document any eligible R&D expenditures.

• Energy Credits: For S corporations engaged in renewable energy initiatives.

• Foreign Tax Credit: If the corporation has paid taxes to a foreign government.

Additional Information to Collect

• Balance Sheet Information: Provide details on assets, liabilities, and shareholder equity.

• Foreign Accounts & Assets: If applicable, additional forms may be required for foreign accounts or income.

• Basis Calculations: Shareholders must keep records of their basis in the S corporation, as it affects their ability to deduct losses.

Why Choose 30A Coastal Accounting Services?

At 30A Coastal Accounting Services, we are here to guide you through the complexities of filing Form 1120-S. Our CPA and tax experts ensure that every aspect of your return is accurately prepared, all deductions are claimed, and compliance with IRS requirements is maintained. To schedule a consultation, contact us at 850.460.1827 or bhumphrey@30acoastalaccounting.com. We look forward to assisting you with your corporate tax needs.

Contact Us Today!

To learn more about our tax preparation services or to schedule a consultation, please reach out to us. We are committed to helping you navigate your tax obligations efficiently and effectively.

S Corporation Tax Return Information Checklist

Basic S Corporation Information

• S Corporation Name and EIN

• Business Address and Contact Information

• Tax Year (Calendar or Fiscal)

• Principal Business Activity and Business Code (NAICS)

Shareholder Information

• Shareholder Names, Addresses, and Identification Numbers

• Ownership Percentages (profit, loss, and capital)

• Shareholder Contributions (cash, property, services)

• Shareholder Withdrawals and Distributions for the year

• Changes in Ownership (if applicable)

Income Information

• Gross Receipts or Sales

• Other Business Income (interest, rental, etc.)

• Returns and Allowances (if applicable)

Expense Information

• Cost of Goods Sold (COGS) (beginning inventory, purchases, ending inventory)

• Operating Expenses:

  • Salaries and Wages (excluding shareholders)

  • Rent (business property)

  • Utilities and Office Expenses

  • Advertising and Marketing

  • Insurance (non-shareholder benefits)

  • Legal and Professional Fees

  • Travel, Meals, and Entertainment

  • Repairs and Maintenance

  • Depreciation and Asset Information

Liabilities and Loans

• Outstanding Debts and Loans (including interest rates and terms)

• New Loans or Liabilities for the year

• Interest Expense (amounts paid on business loans and lines of credit)

Additional Deductions and Credits

• Qualified Business Income (QBI) Deduction Eligibility

• Credits (research and development, energy credits, etc.)

• Contributions to Retirement Plans (SEP, SIMPLE, 401(k))

Balance Sheet Information

• Beginning and Ending Balance Sheets

• Capital Accounts (each shareholder's capital account for the year)

• Loans to Shareholders or Related Parties

• Liabilities (accounts payable, notes payable)

Other Required Documentation

• Prior Year Tax Return (Form 1120-S) for reference

• K-1 Forms for Each Shareholder (to report each shareholder’s share of income, deductions, credits, etc.)

• Any Changes in S Corporation Agreement (if applicable)

By ensuring you have all the necessary information and documentation ready, we can streamline the filing process and maximize your tax benefits.