S Corp Schedule K-1 (Form 1120S): A Simple Guide (2024)

If you own an S corp or share ownership in one with others, you can expect to receive Form 1120S K-1 at the end of the year. Here’s a closer look at the 1120S K-1 and how you can use one to meet your annual tax filing obligations.

What is Schedule K-1 Form 1120S?

1120S K-1, formally known as Schedule K-1 Form 1120S, is an IRS tax form used by owners and investors of S corporations. You can find a blank copy of the Schedule K-1 for Form 1120S on the IRS website.

S Corp Schedule K-1 (Form 1120S): A Simple Guide (1)

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.

The K-1 form consists of three sections:

  1. Part I - Information About the Corporation
  2. Part II - Information About the Shareholder
  3. Part III - Shareholder’s Share of Current Year Income, Deductions, Credits, and Other Items

S corporations are required by law to submit an annual tax return. As part of preparing Form 1120S for the return, your tax preparer should also create a unique Schedule K 1 for every shareholder.

Expert tip: S corporation distributions aren’t considered self-employment income and aren’t subject to self-employment tax. S corp owners will have to pay self-employment taxes on their wages, though. Learn more in our guide to S corporation tax filing.

What is a pass-through entity?

S corporations are a popular method to organize a business for numerous reasons, including tax and legal liability considerations. An S corporation is a type of pass-through entity, which means business income, losses, deductions, and credits “pass through” to the owner’s personal tax return. While the S corporation has to file a tax return, the owners pay the taxes with their personal tax returns.

If your business is eligible for a tax credit, for example, the credit would be included in the business tax return, along with any additional information required about the credit. Any business activity, including business expenses, should be considered when putting together your pass-through entity taxes. If you miss any allowable credits or deductions, you could wind up owing more in personal taxes.

An S corp isn’t the only type of pass-through entity. For example, some LLCs can opt for S corp taxation, which gives them essentially identical tax treatment to a standalone S corporation. It’s critical for businesses to know their tax requirements and submit the right forms by the due date, or they could wind up responsible for paying fines, interest, and penalties related to unpaid taxes.

Learn more: What Is an S Corporation and Should You Form One

Who needs to file Schedule K-1?

If you are an owner or investor in an S corp, you likely need to file the Schedule K-1 Form 1120S. You won’t have to submit the physical form to the IRS, as they already get a copy with the business tax return. That means, however, that the IRS will be on the lookout for the information on your K-1 to be included in your taxpayer return.

Even if your business wasn’t very busy, you still might have interest income, ordinary dividends, or other ordinary business income to report from the prior year. Even if your involvement is only through passive activity, you may still need to file a Schedule K-1. Your complete form may only have one or two boxes complete. If that’s the case, your personal taxpayer information should be easy to enter.

Individuals in the United States submit a version of Form 1040 every year for their personal taxes. The business version, when you own an S corp, is Form 1120S. Your K-1 bridges the gap between the business tax return and your personal income tax return.

How do shareholders use Schedule K-1?

Each box on the K-1 form corresponds to a box on the 1040 form or an added schedule. While there may be complex accounting records behind the scenes, the K-1 is a simple one-page form. This is where your share of income is listed. Even if you didn’t take any distributions, you likely have to include the information from a K-1 with your taxes if the business made or lost money.

Income and other potential tax liabilities are broken out using various boxes. Common information on a K-1 form includes interest, ordinary dividends, qualified dividends, royalties, net short-term capital gain (or loss), and net long-term capital gains.

If you’re working on your personal tax return and received a K-1 form, your accountant will enter this information as required, or you can follow instructions from your tax software. The numbers are ultimately included on the 1040 form used to calculate your total income, adjusted gross income, taxable income, and taxes owed.

Your business 1120S and personal K-1 will include the business Employer Identification Number (EIN). You’ll need that EIN and your Social Security number to complete your individual tax return.

Helpful resource: What is an EIN Number and How Do I Get One?

As with other tax forms, the IRS creates updated instructions for the Schedule K-1 annually. If you have any questions, that’s the first place to look. The shareholder’s instructions include details on where to find and enter information, as well as examples of necessary calculations.

Note: Your K-1 form may require you to pay the Alternative Minimum Tax (AMT). Check with your tax preparer or the IRS for more details.

When is Schedule K-1 Form 1120S due?

There are two main due dates to be aware of when it comes to the 1120S K-1. The first is the tax deadline for the S corporation, followed by the shareholder’s tax due date.

According to the IRS, Form 1120S for S corporations “is due on the 15th day of the 3rd month after the end of the corporation’s tax year.” For most businesses, that means March 15th.

Savvy business owners do their best to get this done early, as shareholders can’t do their personal taxes until 1120S is complete and they get their K-1 forms. If you think you’re going to be late, your business can file for an automatic six-month extension with Form 7004, but that will delay shareholder taxes as well.

Personal taxes are generally due one month later, on or around April 15th. This is where you include the information from your K-1. If your business is running late on getting you any necessary forms, you may have to file an extension and wait on submitting your taxes until everything is wrapped up for the business.

If you need more information on S corporation tax filing deadlines, check out our guide.

1120S K-1 is a simple but important part of business taxes

Depending on your business results, you may wind up with a K-1 form that has only one box completed. That simple number is the summation of your share of a year’s worth of work, so don’t take it lightly.

However you get your 1120S and K-1 forms, it’s important to take the time to ensure they’re done accurately. If you’re worried about getting your taxes done correctly and by the deadline, here’s a look at how Bench can help.

Your business’s 1120S and your personal K-1 work together as important parts of your annual tax filing. Make sure these forms are accurate and on time and you should have a smooth tax filing experience.

S Corp Schedule K-1 (Form 1120S): A Simple Guide (2024)

FAQs

What is S corporation Schedule K-1 Form 1120S? ›

1120S K-1, formally known as Schedule K-1 Form 1120S, is an IRS tax form used by owners and investors of S corporations. You can find a blank copy of the Schedule K-1 for Form 1120S on the IRS website. Schedule K-1 records each owners' share of the business's income, deductions, credits, and other financial items.

How to read a k1 Form 1120S? ›

The S corp K-1 consists of three parts:
  1. Part I - Information about the Corporation. This section contains basic information about the corporation such as its name, address and EIN.
  2. Part II - Information about the Shareholder. ...
  3. Part III - Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items.
Sep 1, 2023

Can I file a k1 by myself? ›

File all Schedules K-1 with your Form 1065.

You may file your return electronically, or you may mail your paper returns to the applicable IRS address listed in the IRS instructions for filling out the Form.

Can I fill out my own k1? ›

A guide to the K-1 Form Part I

We repeat: The issuing entity is the one who fills this out and send it to you. You are not responsible for filling out your own K-1 unless you are the general partner.

Who gets a k1 from an S Corp? ›

S corporations are required to file Form 1120S, which will generate a Schedule K-1 for each owner. The individual owner then uses the Schedule K-1 to complete his or her individual return.

Do you need K-1 for S Corp? ›

The S corporation uses Schedule K-1 (100S) to report the shareholder's share of the S corporation's income, deductions, credits, etc. Information from the Schedule K-1 (100S) is used to complete your California tax return. Keep a copy of Schedule K-1 (100S) for your records.

How is k1 income from S Corp taxed? ›

Your share of S corporation income isn't self-employment income and it isn't subject to self-employment tax. The amount of loss and deduction you may claim on your tax return may be less than the amount reported on Schedule K-1. It is the shareholder's responsibility to consider and apply any applicable limitations.

Can I file 1120S myself? ›

You can file 1120-S online using tax filing software for businesses. But if you don't want to take the time to complete these forms, Block Advisors has your back. Take back the time it takes to complete complex tax forms. Let a certified small business tax pro–armed with an average of 12 years of experience—help you.

Do I have to file 1120S if no income? ›

S-Corp Does the law require an S-Corp. to file with the IRS even if it has no income? For clarity: Even if the corporation has no expenses, depreciation, assets, carryforwards, et al, an 1120-S still needs to be filed as long as the S corporation election remains in effect.

Do you pay taxes on 1120S? ›

S corporation shareholders use IRS Form 1120-S to report their share of the company's annual distributions on their personal income return. Because profits and losses are “passed through” to the shareholders, the S corp does not generally pay federal taxes at the corporate level.

What is line 16D on the 1120s K-1? ›

Form 1120-S - Withdrawal to Shareholders. Form 1120-S - Withdrawal to Shareholders. Each shareholder's distribution amount for the corporation's fiscal year should be reported on Schedule K-1 (Form 1120-S) Shareholder's Share of Income, Deductions, Credits, etc., Line 16, with "D" as the reference code.

How do I put k1 on my tax return? ›

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.

Do you have to file a k1 if no income? ›

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.

Do you get a k1 with an S Corp? ›

S corporations are required to file Form 1120S, which will generate a Schedule K-1 for each owner. The individual owner then uses the Schedule K-1 to complete his or her individual return.

Is there a k1 for S Corp? ›

S corporations provide a Schedule K-1 that reports each shareholder's share of income, losses, deductions, and credits that are reported to the IRS on Form 1120S. Some trusts and estates pass income through to the beneficiaries.

What is a k1 income for an S corporation? ›

Schedule K-1 is a federal tax document used to report the income, losses, and dividends for a business' or financial entity's partners or an S corporation's shareholders. The K-1 form is also used to report income distributions from trusts and estates to beneficiaries.

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