Form 1120S

DEFINITION of 'Form 1120S'

A tax document used to report the income, losses and dividends of S corporation shareholders; it is an S corporation's tax return. Form 1120S is part of the Schedule K-1 document. It is prepared for each individual shareholder and identifies the percentage of company shares owned by the individual for the tax year.


For a partnership, Form 1065 is submitted instead of Form 1120S.

BREAKING DOWN 'Form 1120S'

The IRS uses the ownership percentage to allocate how much profit and loss should be assigned to an individual shareholder. This is easily calculated if the shareholder doesn't see a change in the percentage during the year, but if shares are bought, sold or transfered during the course of the year then profit and loss has to be pro-rated on a per-share basis.




RELATED TERMS
  1. Schedule K-1

    A tax document used to report the incomes, losses and dividends ...
  2. Form 1065

    A tax document used to report the profits, losses and deductions ...
  3. Subchapter S (S Corporation)

    A form of corporation that meets the IRS requirements to be taxed ...
  4. IRS Publication 542

    A document published by the Internal Revenue Service (IRS) that ...
  5. Tax Return

    1. The tax form or forms used to file income taxes with the Internal ...
  6. Tax Rate

    The percentage at which an individual or corporation is taxed. ...
Related Articles
  1. Term

    How A Schedule K-1 Works

    Schedule K-1 is a U.S. tax document used to report income, losses and dividends.
  2. Entrepreneurship

    S Corp. Vs. LLC: Which Should I Choose?

    Understand the major distinctions between an S corporation and an LLC, and the important factors to consider when choosing your business structure.
  3. Economics

    Explaining Corporate Tax

    A corporate tax is a tax levied on the profits a corporation generates.
  4. Entrepreneurship

    Taxes in New York for Small Business: The Basics

    Learn how small businesses are taxed in New York, and understand how tax rates vary based on whether the business is an S corporation, LLC or partnership.
  5. Savings

    Explaining Tax Returns

    A tax return is the form or forms used to file income taxes with the IRS.
  6. Investing Basics

    Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
  7. Taxes

    Explaining Double Taxation

    Double taxation refers to income taxes being imposed twice on the same source of earned income.
  8. Investing Basics

    Who is a Shareholder?

    A shareholder is a person, company or other entity that owns at least one share of a company’s stock.
  9. Entrepreneurship

    Taxes in Texas for Small Business: The Basics

    Learn the tax implications for small businesses in Texas, and discover how different types of small businesses, such as LLCs and S Corporations, are taxed.
  10. Entrepreneurship

    Taxes in California for Small Business: The Basics

    Understand the tax implications of running a small business in California, and learn which state taxes apply based on business type.
RELATED FAQS
  1. What are Schedule K-1 documents used for?

    The Schedule K-1 is a tax document issued for an investment in partnership interests. The purpose of the Schedule K-1 is ... Read Answer >>
  2. In what situations would a loan to an S Corporation from one of its principals be ...

    Learn how creating a debt agreement is the key to ensuring a principal's loan to an S corporation is not classified as an ... Read Answer >>
  3. If you have a house that is under your company name and you want to sell it back ...

    The answer to this question really depends on the type of legal entity your business is operated through. Businesses may ... Read Answer >>
  4. How does the effective tax rate for an individual differ from that of a corporation?

    Read about the effective tax rate for individuals when compared with the effective tax rate for corporations, including how ... Read Answer >>
  5. What are some characteristics of ordinary shares?

    Read about some of the primary characteristics of ordinary shares, also known as common shares, including voting rights and ... Read Answer >>
  6. What rights do all common shareholders have?

    Learn what rights all common shareholders have, and understand the remedies that can be taken if those rights are violated ... Read Answer >>
Hot Definitions
  1. Physical Capital

    Physical capital is one of the three main factors of production in economic theory. It consists of manmade goods that assist ...
  2. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  3. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  4. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  5. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  6. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
Trading Center