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What kind of entity do you have?
All About S Corp Tax Return Forms
The IRS created the S Corp status to support entrepreneurs in growing their small businesses and reduce the self-employment tax burden for owners. Before this option, small business owners faced either being taxed as a disregarded entity, a partnership, or dealing with the double taxation of C Corps.
S corporations operate as pass-through entities. This means that instead of the corporation paying federal taxes on its profits, that responsibility passes to the individual shareholders. However, they're still recognized as separate entities from their shareholders and must file different returns and forms with the IRS.
This guide will answer questions like what is a 1120-S form used for, Is 1120-S the same as the K-1 form and where can I find 1120-S instructions.
Table of contents
Key Takeaways:...Read more
What tax return form does an S Corp file?...Read more
Form 1120-S...Read more
What is Form 1120-S for a small business?...Read more
Schedule K-1...Read more
Is an S corp or LLC better?...Read more
What happens if you don't file 1120-S?...Read more
Other important S Corp tax return forms...Read more
Key Takeaways:
- Form 1120-S and Schedule K-1 are the main forms needed to file the annual S Corp taxes.
- The S Corp tax filing deadline is generally March 15th every year.
- S Corps also need certain forms managing payroll taxes.
What tax return form does an S Corp file?
S Corporations are a type of business where the taxes on profits aren't paid by the company itself. Instead, the individual shareholders pay those taxes on their personal returns. However, this doesn't mean the IRS ignores S Corps. The IRS sees them as separate entities from their owners and requires them to file various forms and returns.
What is the difference between Form 1120 and the 1120-S tax form?
What is the difference between 1120 and 1120-F?
Form 1120-S
Form 1120-S is what S Corps use to file their federal income tax return. Every S corp, including LLCs taxed as S corps, needs to file this form. The 1120-S due date generally falls on March 15, every year unless you get an extension.
You can request an extension using Form 7004 by March 15. If approved, your new filing deadline will be September 15. However, you still need to pay an estimated amount of your tax bill by the original March deadline.
The instructions for 1120-S can be tricky. Depending on your situation, there are several Schedules you might need to complete. That’s why asking a tax pro to help is always a good idea.
What is the difference between the 1120-S form and Form 1065?
How to report ERC on tax return 1120-S?
What is Form 1120-S for a small business?
Form 1120-S is what small businesses operating as S Corps use to file their federal income taxes. It's where they report all their financials like income, losses, deductions and credits. The IRS website has detailed Form 1120-S instructions for help with each step.
Schedule K-1
Schedule K-1 is where you report your share of the income, deductions and credits from your ownership in the S Corp. If your LLC is taxed as an S Corp, you'll also use Schedule K-1. Since S Corps pass their income through to shareholders, you'll need your Schedule K-1 to complete your personal S Corp tax return form. This schedule is a part of Form 1120-S.
The corporation sends all K-1s to the IRS along with Form 1120-S. Each owner also receives their own copy to use when filing their personal tax returns.
Is 1120-S the same as K-1?
Is an S corp or LLC better?
Choosing between an S Corp and an LLC depends on your specific business needs and goals. An S Corp offers potential tax advantages like pass-through taxation and allows for a structured ownership and management system, similar to a traditional corporation.
On the other hand, an LLC provides flexibility in management structure and profit distribution. It offers limited liability protection to its members and has fewer formal requirements compared to an S Corp. Remember, you can have an LLC and choose to be taxed as an S Corp.
Choosing the best one for you depends on how you want to run your business and handle taxes.
What happens if you don't file 1120-S?
If you don't file Form 1120-S, the S Corp tax return form, it could lead to trouble with the IRS. They might hit you with penalties, especially if there are taxes you owe. Plus, it could trigger audits or inquiries into your business finances, adding more hassle.
Not filing your S Corp tax return forms on time could also mess with your business’s good standing. This might affect your ability to obtain financing, enter into contracts or even continue business operations smoothly.
Other important S Corp tax return forms
Apart from Schedule K-1 and Form 1120-S, there are a few other tax forms S Corps need to file taxes. First off, there's Form W-2. This one goes to your employees each year, summarizing how much they earned and what taxes were withheld. You'll file it with the IRS and give copies to your team so they can do their personal taxes.
Next, there's Form 941. This form is filed quarterly and covers all the wages and payroll taxes your business paid during that quarter, like federal withholdings and Social Security and Medicare taxes.
Then there's Form 940. This one's an annual report on the federal unemployment taxes your S Corp has paid throughout the year. Accompanying Form W-2 is Form W-3, which summarizes the total wages and tax withholdings for all your employees.
Lastly, if you've paid an independent contractor $600 or more in a year, you'll need Form 1099-NEC. This form goes to the IRS and to the contractor, so they can report their earnings on their personal tax return.
FlyFin’s comprehensive S Corp tax filing service has got you covered. You can get unlimited tax support from expert CPAs who can answer questions like what is the difference between 1120-S and the 1120 form and prepare and file your returns for you. AI also scans your expenses to find all your tax deductions, making sure you’re saving the most possible.
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