What is Form 1120s?

Form 1120S is the U.S. Income Tax Return for an S Corporation, an information return reporting the corporation's income, deductions, gains, and losses that pass through to shareholders on Schedule K-1. For professional service firm owners operating as S corporations, Form 1120S is the annual business tax return due March 15.

Key characteristics

• S corporation annual return

• Information returns only

• No tax paid at the corporate level

• Income passes through to shareholders

• Due March 15 for the calendar year

• Generates K-1 for each shareholder

Why it matters for professional service firms

Form 1120S determines how S corporation income flows to shareholders. Late filing triggers penalties of $220 per shareholder per month. Professional service firms operating as S corporations must file Form 1120S by March 15 or request an extension to provide K-1s for shareholders' personal returns.

Real-world example

Patricia's single-shareholder S corporation had gross receipts of $420,000, officer compensation of $120,000, other deductions of $85,000, and ordinary income of $215,000. Form 1120S reported these amounts, and Schedule K-1 showed Patricia's 100% share: $215,000 ordinary income flowing to her Form 1040. S corporation paid no tax; Patricia paid tax on her share.