Form 1120-S

Meaning & Definition

Form 1120-S is a tax return for S Corporations in the USA, which reports an S Corporation’s income, deductions, gains, and losses to the federal government on behalf of its shareholders. Unlike regular corporations, S Corporations do not pay taxes at the corporate level because their income is reported as personal income by the shareholders when filing their individual tax returns.

Importance of Form 1120-S

• S corporations use this form to report all annual activity.
• Assists S corporations with pass-through taxation to eliminate double taxation.
• This form will help individual shareholders report their share of income on their personal tax returns.
• It will help an S corporation adhere to the requirements of US corporate taxation.
• This form is necessary to ensure correct financial and tax reporting.
• This form is relevant to global HR and payroll teams that handle US companies.

Legal Compliance 

• This form does not apply to an Indian jurisdiction.
• It will be governed by the Internal Revenue Service (IRS), USA.
• File the return based on the U.S. Internal Revenue Code (Subchapter S).
• Form required to be filed annually for all S Corporations.