How do I report income received on Schedule K-1 form 1120s for a business? The only options I get are K-1 for Parternships or Trust/Estate. Using TurbTax Business. (2024)

FAQs

How do I report Schedule K-1 income? ›

The K-1 isn't filed with your tax return, unless backup withholding was reported in box 13, code B.7 Keep it with your records. The trust or estate files a copy of Schedule K-1/Form 1041 with the IRS.

Use Schedule K-1 to report a beneficiary's share of the estate's or trust's income, credits, deductions, etc., on your Form 1040 or 1040-SR. Keep it for your records. Don't file it with your tax return, unless backup withholding was reported in box 13, code B.

Schedule K-1 records each owners' share of the business's income, deductions, credits, and other financial items. The corporation submits a copy of all K-1s to the IRS with the 1120S form. Each owner gets their own copy used to complete their personal tax returns.

Use Form 1120-S to report the income, gains, losses, deductions, credits, etc., of a domestic corporation or other entity for any tax year covered by an election to be an S corporation.

Ordinary income reported to an individual shareholder on Schedule K-1 from an S corporation is not considered self-employment income. Such income is investment income. It is thus not subject to self-employment tax, nor is it included in the calculation of earned income for the credits that are based on earned income.

Ordinary income reported to an individual shareholder on Schedule K-1 from an S-Corporation is not considered earned income. Such income is investment income, thus not subject to self-employment tax, and it isn't taken into account when calculating a tax credit that uses earned income in its calculation.

Purpose of Schedule K-1

Keep it for your records. Don't file it with your tax return unless you're specifically required to do so.

Box 14 Self Employment Earnings (Losses)

If there is a positive amount reported to you in this box, please report the amount as it is reported to you. This will be reduced appropriately by the program by any section 179 deduction you previously reported.

What if My Partnership Isn't Profitable? If your business is operating at a loss and there is no taxable income for any partner or shareholder to report, the partnership is still responsible for issuing Schedule K-1s.

The corporation uses Schedule K-1 to report your share of the corporation's income, deductions, credits, and other items. Keep it for your records. Don't file it with your tax return unless backup withholding is reported in box 13 using code O.

What is included in Schedule k1 Form 1120S? ›

Schedule K-1 1120-S Form:

Part II - Information about the Shareholder. This section contains information about the shareholder and their investment in the corporation. Specifically, this section identifies the percentage of stock ownership that the shareholder has for the tax year.

Schedule K is different from Schedule K-1. While Schedule K is found on page 4 of Form 1065 and is essentially a summary schedule of all the partners' shares of the partnership's income, credits, deductions, and more. Schedule K-1, on the other hand, shows each partner's separate share.

In the context of an S corp, shareholders may receive a salary for their services to the corporation, which would be considered earned income. However, any remaining income distributed to shareholders as dividends or through the pass-through mechanism is generally not considered earned income.

Because of pass-through taxation, the S corporation doesn't pay federal income tax on its business income the way a C corporation does. Instead, business income, deductions, losses, and other tax items flow through (or pass through) to the business owners (e.g., the shareholders).

“S corporation” stands for “Subchapter S corporation”, or sometimes “Small Business Corporation." It's a special tax status granted by the IRS (Internal Revenue Service) that lets corporations pass their corporate income, credits and deductions through to their shareholders.

The partnership uses Schedule K-1 to report your share of the partnership's income, deductions, credits, etc. Keep it for your records. Don't file it with your tax return unless you're specifically required to do so.