How to File an S Corp Tax Return

If you have an S corporation (S corp), you’ll need to file Form 1120-S, a five-page form that details your company’s income, deductions, tax and payments, and other important information.

Our S Corp Tax Return guide will introduce you to the process of filing Form 1120-S for your S corp.

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S Corp Tax Return Forms

S corps use IRS Form 1120-S, U.S. Income Tax Return for an S Corporation, to file their federal income tax returns.

To fill out the form, the IRS requires you to provide various pieces of information.

These include, but are not limited to:

Your company’s gross receipts and profits
Officer compensation
The cost to manufacture or produce your company’s products and/or services
Employee salaries and wages
Any estimated tax payments you made during the tax year
Any refundable credits you are carrying over from previous tax years
Information about your business, including its name, when it was incorporated, and when you made the S corp election
A statement showing profits and losses
A balance sheet for the company
Your company’s business activity code and your EIN, which the IRS uses to identify your company for tax purposes
A list of payments to independent contractors who your company paid $600 or more

When is the Deadline for Filing S Corp Taxes?

The S corp tax return due date is March 15. If needed, S corps can apply for a six-month filing extension by filing IRS Form 7004 either by mail or electronically.

Instructions for Form 1120-S for S Corp Taxes

Part 1: Contact & Business Information

The first part of the form contains basic contact information for your company. This includes the company’s name, address, EIN, incorporation date, S corp election date, business activity code, and total assets.

There are some additional questions in this section, such as whether the corporation is electing S corp status in the current tax year, whether there is a name or address change, and the number of shareholders the company had during the tax year.

Part 2: Income

The next section deals with your company’s revenues for the year, taken from your income statement. This includes items like gross receipts or sales, returns and allowances, and the cost of goods sold.

Part 3: Deductions

In this section, you will record all of your business expenses that are deductible for the tax year. This can include, for example, officer compensation, salaries and wages, repairs and maintenance, bad debts, rents, taxes and licenses, advertising, and depreciation and interest.

Part 4: Tax and Payments

The last section of Form 1120-S only applies to a certain subset of S corps: those that began the tax year as C corps and filed for S corp status sometime during the year.

S corps that fall into this category use Part 4 to list any estimated taxes they have already paid, as well as to calculate whether they still owe taxes or are due a refund, such as if a C corp sold assets for a profit during the tax year.

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How to Complete Form 1120s Schedules

Form 1120-S has six schedules. Three of them (Schedules B, D, and K) must be filled out by all S corps, and three (Schedules L, M-1, M-2, M-3) are conditional.
All schedules except M-3 are included on Form 1120s.

1120s Schedule B

Schedule B "Other Information" asks a series of multiple-choice or yes/no questions. These pertain to topics like your company’s accounting method, business activity, and product or service.

You will also have to answer questions about such topics as:

Whether any shareholder was a disregarded entity, trust, estate, or nominee during the tax year
The company’s ownership of the stock of any foreign or domestic corporation, or interest in any foreign or domestic partnership, at the end of the tax year
Any outstanding shares of restricted stock at the end of the tax year
Any outstanding stock options, warrants, or similar instruments at the end of the tax year
Gross receipts

Your answer to question 11, pertaining to total receipts and assets, will determine whether you have to fill out Schedules L and M-1.

1120s Schedule D

Use Schedule D to report your S corp’s capital gains or losses during the tax year. This includes income from selling assets like stocks or bonds.

1120s Schedule K

Schedule K "Shareholders’ Pro Rata Share Items" incorporates information about your company’s income, deductions, and tax credits you’re claiming. Use this information to file a Schedule K1 for each of your S corp’s shareholders, based on what percentage of the corp’s shares they own.

Among other things, this schedule asks for:

Ordinary business income
Net rental real estate income or loss
Other gross rental income or loss
Interest income
Dividends
Royalties
Capital gains
Charitable contributions
Investment interest expenses
Credits for low-income housing, rental income, rehabilitation expenses
Tax-exempt interest income

Instructions for 1120s K-1 can be found on page 22 of the IRS 1120s instructions.

1120s Schedule L

Schedule L, Balance Sheets per Books, provides the IRS with an overview of your company’s assets, liabilities, and equity. Use your company’s balance sheet to complete this schedule, including information about cash, trade notes and accounts receivable, inventories, loans, depletable assets, accounts payable, mortgages, etc.

Only two categories of S corps must complete Schedule L:

Those that had more than $250,000 in receipts in the current tax year
Those that held more than $250,000 in assets in the current tax year

Instructions for 1120s L can be found on page 44 of the IRS 1120s instructions.

1120s Schedule M-1

Using Schedule M-1, report any differences between the profits or losses you reported in your company’s books and those reported on your taxes. There are several reasons such discrepancies could arise, for example if you earned tax-exempt interest.

Instructions for 1120s M-1 can be found on page 44 of the IRS 1120s instructions.

1120s Schedule M-2

1120S schedule M-2 analyzes adjustments to the accumulated earnings account, previously taxed income account, and other adjustments account.

Instructions for 1120s M-2 can be found on page 45 of the IRS 1120s instructions.

1120s Schedule M-3

Use Schedule M-3, to report net income (loss) reconciliation for S corporations with total assets of $10 million or more.

Visit the IRS website for detailed Schedule M-3 instructions.

Where to Mail S Corp Tax Returns

For S Corps Operating In:

Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, Wisconsin

With total assets at the end of the tax year that are less than $10 million and Schedule M-3 is not filed:

Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999-0013

With total assets at the end of the tax year that are less than $10 million and Schedule M-3 is not filed:

Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999-0013

With total assets at the end of the tax year that are $10 million or more or Schedule M-3 is filed:

Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0013

For S Corps Operating In:

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming

Any amount of assets:

Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0013

For S Corps Operating In:

A Foreign Country or U.S. Possession

Internal Revenue Service
P.O. Box 409101
Ogden, UT 84409

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S Corp Tax Return FAQ

S corps don’t pay a corporate income tax. Instead, owners pay personal income tax on the company’s earnings. For more information, see our S Corp Taxes guide.

This depends on how much the company makes. As a general rule of thumb, it only makes sense to file taxes as an S corp if there is enough net profit to pay owners a reasonable salary and at least $10,000 in annual distributions.

Check out our LLC Tax Guide, and read more about the similarities and differences between LLCs and S Corps in our LLC vs S Corp guide.

The S corp doesn’t have a specific tax rate because S corp income passes through to the owner’s individual tax return. At that point, the S corp income is subject to federal, state, and FICA taxes based on the individual owner’s tax bracket and filing status.

For more information, see our S Corp Taxes guide.

An S corp is a tax status that can be elected by an LLC or corporation. LLCs and corporations have limited liability protection. A business owner will not lose liability protection by electing S corp tax status.

For more information, see our What is an S Corporation?

You can find the PDF IRS tax returns forms in our S Corp Tax Returns guide.

Yes, subchapter S is the same thing as an S corp. For more information, see our What is an S Corporation guide.

An S corp is a pass-through tax status. The S corp isn’t taxed on its profit. Instead, the profit passes through to the owner's individual tax returns. An S corp does have to pay employer FICA taxes on employee salaries. For more information, see our S Corp Taxes guide.

Yes, an S corp files taxes at the state and federal level. For more information, see our S Corp Taxes guide.

The default LLC tax status is better for small businesses that reinvest profit to grow their business. An S corp is better for businesses that have profit left over to pay owners a reasonable salary and at least $10,000 in distributions.

For more information, see our LLC vs. S Corp guide.

Yes, S corp income passes through to the owner’s individual tax returns and is subject to state income taxes.

For more information, see our S Corp Taxes guide.

Yes, an S corp owner must take a reasonable salary per IRS guidelines. Reasonable is defined as being a fair market salary for the work performed.

For more information, see our What is an S Corporation guide.