Similar to a partnership, an S corporation is its only legal entity; however, it pays no tax though there are some exceptions. It does, however, file its own tax return (i.e., Form 1120-S or the US Income Tax Return for an S Corporation). The filing deadline for partnership returns is March 15th. Form 1120-S includes a profit and loss statement, balance sheet, and information on all its partners.
View Form 1120-S
Each partner will be given a Schedule K-1 (i.e., Shareholder’s Share of Income, Deductions, Credits, etc.), which represents their share of the profit and loss from the S corporation. This schedule is used by tax preparers when preparing your annual income tax return. Your share of the profit and loss will either increase or decrease your taxable income, thus the amount of tax you pay personally.
View Schedule K-1
The Schedule K-1 information is a report on various forms and schedules of Form 1040. The most prevalent of these forms is Schedule E (i.e., Supplemental Income and Loss). Please contact us for questions or assistance needed to file your income tax returns.