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S Corporation Income Tax

An S corporation income tax is filed using the IRS tax form 1120S or the US Income Tax Return for an S Corporation. You can obtain this IRS tax form1120S for S Corporation income tax filing directly from the IRS. The S corporation income tax is filed by each shareholder of the S corporation.

S Corporation Income Tax

A C corporation Vs an S corporation

A C corporation may elect not to be subject to income tax. In order to not be subject to income tax, the C corporation needs to qualify and as an S corporation and elect to become an S corporation. Once a C corporation elects to become an S corporation, the C corporation's income is taxes at the shareholders level.

How to qualify for an S corporation?

A C corporation qualifies as an S corporation if:

  • the C corporation is a domestic corporation (organized in the United States or under federal or state law)
  • The C corporation must have only one class of stock.
  • The C corporation must have no more than 75 shareholders.
  • The C corporation must have only individuals, estates, and certain trusts as its shareholders. Partnerships and corporations are not allowed to be shareholders of an S corporation.
  • All shareholders must be citizens or residents of the United States. Nonresident aliens cannot be shareholders of an S corporation.
How to report income tax for my share of an S corporation?

Use the IRS tax form 1120S to file income tax for your share of an S corporation's income. Schedule K and Schedule K-1 of the 1120S IRS tax form are very important. Schedule K of this IRS tax form summarizes the S corporation's income, deductions, credits, etc which each shareholder of the S corporation must report. Schedule K-1 shows each shareholder's separate share. Individual income tax is reported on IRS tax form 1040.

When is the income tax filing due for S corporation?

The IRS tax form 1120S for income tax for an S corporation is due on the 15th day of the third month after the end of the tax year.