IRS Form 1120-S

What Is Form 1120-S?

IRS Form 1120-S is the federal income tax return filed by an S corporation. It reports the corporation’s income, deductions, credits, and other tax items and provides Schedule K-1 information to the shareholders.

Form 1120-S for an S Corporation

An S corporation generally does not pay federal income tax at the entity level on most operating income. Instead, tax items pass through to the shareholders and are reported on their individual returns.

What Is Schedule K-1 for Form 1120-S?

Schedule K-1 reports each shareholder’s share of the S corporation’s income, deductions, credits, and other tax items. Shareholder basis and distributions can affect how those amounts are ultimately treated.

Schedule L on Form 1120-S

Schedule L is the balance sheet included with Form 1120-S when required. It reports beginning and ending asset, liability, and equity balances and should reconcile to the corporation’s accounting records.

When Does an S Corporation Need a Balance Sheet?

Some S corporations must complete Schedule L and related book-to-tax reconciliation schedules. If the return requires a balance sheet, additional accounting review is often needed to reconcile the books to the tax return.

S Corporation Tax Preparation Options

Compare the included reporting, shareholder and state limits, and exclusions on the service pages below. If the books need cleanup, contact CPA of Denver before starting a fixed-scope engagement.

For standard S corporation tax return preparation, see our Denver S corporation tax return preparation service.

If your return requires Schedule L and more extensive book-to-tax reconciliation, see our S corporation return with balance sheet service.