Form 1120S S-Corporations

Form 1120S is the U.S. Income Tax Return for an S Corporation. S corporations are "pass-through" entities, which means that they generally do not pay federal income tax themselves. Instead, their income, deductions to their shareholders, who report the income on their tax returns. Here's a general overview of the steps involved in completing Form 1120S:

Part I: Income

Income:

Report the corporation's gross receipts or sales. Deduct returns and allowances to arrive at total income.

Cost of Goods Sold (COGS):

If applicable, deduct the cost of goods sold to determine gross profit.

Other Income:

Report other income not from the corporation's regular business activities.

Part II: Deductions

Salaries and Wages:

Report all wages, salaries, and other compensation paid to employees.

Repairs and Maintenance:

Deduct costs associated with the ordinary and necessary business property repairs and maintenance.

Bad Debts:

Report bad debts that became partially or wholly worthless during the tax year.

Rent Expense:

Deduct rent paid for business property.

Taxes:

Report state and local income taxes, real estate, and other business-related taxes.

Interest Expense:

Deduct interest paid on business loans or credit.

Charitable Contributions:

If applicable, report contributions made to qualified charitable organizations.

Part III: Income Determination

Income Before Income Tax:

Calculate the corporation's income before income tax.

Part IV: Tax and Credits

Income Tax:

While S corporations generally do not pay federal income tax, this section reports certain taxes, such as built-in gains tax and excess net passive income tax.

Payments:

Report any estimated tax payments made during the tax year.

Refundable Credits:

Report any refundable credits that the corporation may be eligible for.

Other Taxes:

Report any additional taxes owed by the corporation.

Total Tax:

Sum the income tax, payments, refundable credits, and other taxes to determine the total tax.

Part V: Other Information

Consent Plan and Revocation:

If applicable, provide information about any consent plan or revocation of a plan.

Schedule K and Other Schedules

Schedule K:

Detail the corporation's income, deductions, and credits.

Signature

Sign and Date:

The return must be signed and dated by an authorized officer.

Filing

File the Return:

Mail the completed Form 1120S and Schedule K-1s to the appropriate IRS address.

It's important to note that S corporations have specific eligibility criteria, and shareholders must meet certain qualifications. As tax laws can change, staying updated or consulting with tax professionals for specific advice related to your S corporation's situation is advisable.