If you choose to operate as an S-corp, you’re most likely going to need to deal with form 1120 S. What exactly does this form entail? How to fill it out and where to file it? In this post, we’ll cover the basics of what form 1120 S is all about. Stay tuned.

What Is IRS Form 1120 S?

It’s a document you’ll need to get the gist of if you choose your organization to pay taxes not as the conventional C Corporation, but as an S corporation instead. This will grant you some delish tax perks — along with certain administrative difficulties — but something’s always gotta give, right?

So, what is the 1120 S form exactly? It’s a document utilized for reporting an S Corporation federal tax return. Your business can file this form only if you’ve already submitted form 2553 (transformed from a C corp to an S corp), and if the IRS has successfully approved this ‘transformation’.

So, basically, you need this form for:

  • reporting your business’s earnings;
  • revealing your company’s annual gains;
  • lettin the IRS in on your organization’s losses;
  • as well as reporting deductions and credits your operation entails.

What Are the Form 1120S Instructions?

The doc is a five-pager, with 6 schedules included. Here are the detailed instructions on how to complete it the right way:

1. Specify business information. Start by specifying the tax period you’ll be reporting within. Type your company name and contact information. Complete all the required fields with all the needed details about your organization.

2. Specify income details, such as your company gains and losses within the stated period. Finalize the section by reporting your total income. Then, sort out deductions and indicate the total deductions amount. Answer the form’s questions related to the S election date and fill out all the fields the document requires.

3. Fill out Schedule B. This will most likely require answering certain short questions and possibly attaching forms 8990 or 8281. You’re going to need to use a reliable PDF editor to cope with this task in the fastest and smoothest way possible.

4. Fill out Schedule K. This section features such fields as income, losses, credits, deductions, and some others. Complete it with maximum focus and attention to each and every detail.

5. Move on to Schedule L. Here, you’ll need to report your assets and/or investments within this tax year. Double-check all the data prior to moving forward.

6. Finalize the process by sorting out Schedules M-1 and M-2. In case you come across any difficulties filling out this part (or the form in general), you can always turn to professional assistance. In either case, top-level cloud-based PDF editors like PDFLiner are of great help when it comes to managing your tax affairs. They allow for endless edits and customizations, provide game-changing e-signatures, and offer secure file storage perks.

7. Double-checked the file and 100% certain of its errorlessness? Great! Don’t forget about dating and signing the doc when you’re through completing its main part.

Completing forms like 4070 is not a cakewalk. But if you equip yourself with excellent tools and services like PDFLiner, for example, you are bound to succeed.

Where to File Form 1120 S?

Like most tax documentation, this particular document can be completed online within the IRS system or with the help of a solid tax prep service. Alternatively, you can print the form out, fill it out manually, and send it by mail. The method you’ll stay with is solely up to you. Just remember that despite the learning curve and investment, going the digital route is the most effective way of managing your tax docs these days. It saves heaps of your treasured time and allows you to focus on what you do best: bringing the money in.

Final Word

Form 1120 S is crucial for several reasons. First, it reports your income. Second, it lets the IRS in on what percentage of the operation belongs to company shareholders. This, in its turn, determines their tax payments or refunds within their personal income tax returns. With all that said, filling out this form correctly and on time is paramount — as well as having a top-of-the-line PDF editing platform at your fingertips.