What IRS Form 1120-S (2015) Is For
IRS Form 1120-S (2015) is the official U.S. Income Tax Return for an S Corporation for the 2015 tax year. An S Corporation uses this form to report income, deductions, credits, and adjustments accurately. While the company itself generally does not pay federal income tax, its shareholders report the ratable share of profits or losses on individual returns through Schedule K-1. This ensures that all income is properly chargeable to the correct taxable year.
S Corporations must file this form to meet IRS and Affordable Care Act (ACA) reporting requirements, especially if they were applicable large employers offering affordable health insurance to eligible employees. Providing accurate data ensures compliance with ACA regulations and maintains correct adjustments to the accumulated adjustments account. Corporations with past filing issues should review any unfiled 1120-S S corporation returns to ensure compliance and avoid additional IRS notices.
When You’d Use Form 1120-S for 2015 (Late or Amended Filing)
You would file a late or amended 2015 Form 1120-S if your company received IRS notices for missing or inaccurate returns, needed to correct shareholder K-1s, or made corporate separations affecting distributions. If your company offers affordable health coverage or employer-sponsored health plans, accurate filing helps determine eligibility for the premium tax credit and avoids potential penalties under ACA compliance rules.
Refund claims for the 2015 taxable year are limited because the statute of limitations has expired for most cases. Refunds must be claimed within three years of the original due date or two years from the date of payment. However, small employers may still benefit by confirming their data through IRS transcripts before amending old filings. If you are unsure which supporting forms or schedules to include, the IRS Form Help Center provides guidance on filing late or amended S corporation returns.
Key Rules Specific to 2015
- Affordable Care Act Reporting: Applicable large employers with 50 or more full-time equivalent employees were required to file Forms 1094-C and 1095-C. These forms provided timely information about minimum essential coverage and health coverage offered to covered individuals.
- Built-In Gains Tax: The built-in gains tax recognition period was permanently extended to ten years, affecting corporations that converted from C Corporation status.
- Late Filing Penalties: Penalties increased to $195 per shareholder per month for returns filed more than 60 days late, up to a maximum of 12 months. Filing as soon as possible and providing reasonable cause can help limit these charges.
Businesses struggling with penalties or ACA-related compliance requirements may benefit from exploring business tax relief programs designed to help resolve outstanding corporate tax issues.
Step-by-Step (High Level)
- Gather Records: You should request IRS transcripts, financial statements, and prior-year business tax forms to ensure accurate data for the previous calendar year.
- Use the Correct Form: You should complete the official IRS Form 1120-S (2015) to file your corporation’s return, ensuring it aligns with the correct taxable year.
- Prepare K-1s: You should issue complete and accurate Schedules K-1 reflecting each shareholder’s ratable share of income, deductions, and credits.
- Attach Schedules: Include any necessary attachments, such as Form 8825 for rental real estate or Schedule M-3 for corporations with significant assets that constitute complex ownership structures.
- File the Return: You should e-file electronically if supported; otherwise, you must mail the tax return to the appropriate IRS service center.
- Retain Copies: You should keep copies of all filed documents, K-1s, and proof of submission for business records and ACA compliance.
If your S corporation owes taxes after completing the return, you may apply for an IRS payment plan to manage the balance over time.
Common Mistakes and How to Avoid Them
- Ignoring Late Filing Penalties: You should avoid missing deadlines because the IRS assesses $195 per shareholder per month, which can quickly accumulate.
- Incomplete K-1s: You should verify that K-1s are complete and include accurate data to prevent errors in distributions or shareholder reporting.
- Incorrect Elections: You should confirm that your Form 2553 election approval is valid before filing to protect your S Corporation status.
- Accumulated Adjustment Errors: Ensure the accumulated adjustments account and any net negative adjustments are correctly calculated to prevent distribution errors.
- ACA Reporting Mistakes: Confirm that employer-sponsored health benefits and minimum essential coverage offered to employees are accurately reported to meet ACA requirements.
- Using Wrong-Year Forms: You should always use forms for the correct tax year and include ACA-required documents to avoid processing delays.
Late or inaccurate filings can trigger IRS notices or collections, so reviewing the IRS collection process can help you understand what may happen if the agency takes action.
What Happens After You File
The IRS typically processes S Corporation tax returns within four to six weeks. However, late or amended filings may take longer, especially when ACA compliance data is involved. If the IRS identifies missing coverage information or improperly reported household income for eligible employees, it may issue notices or request clarification.
If tax or penalties are owed, the company can arrange installment payments using Form 9465. In some instances, the IRS may abate penalties if the taxpayer demonstrates reasonable cause, such as illness, natural disasters, or professional error. Maintaining accurate records ensures the timely provision of information for both federal and state reporting.
FAQs
What is IRS Form 1120-S (2015), and how does it relate to business taxes?
IRS Form 1120-S (2015) reports an S Corporation’s income, deductions, and credits for the tax year. While the corporation itself does not pay income tax, shareholders report their share of the income individually. Accurate filing ensures compliance with IRS business tax requirements and keeps corporate reporting aligned with federal rules.
How do applicable large employers meet ACA reporting requirements?
Applicable large employers must file Forms 1094-C and 1095-C to show compliance with ACA reporting requirements. These forms identify full-time employees, covered individuals, and the health coverage offered. Providing accurate data helps confirm that affordable health insurance was offered to eligible employees and reduces the risk of penalties.
How does the accumulated adjustments account affect my S Corporation?
The accumulated adjustments account records income and deductions properly chargeable to shareholders. Errors here can alter the ratable share of distributions or create tax discrepancies. You should correct mistakes promptly to ensure accurate reporting of earnings and avoid complications during redemption, distribution, or stock changes.
What ACA compliance steps must large employers follow?
Large employers must verify that all eligible employees received an offer of affordable health insurance that meets minimum essential coverage and minimum value standards. Employers must also report this information accurately each calendar year to the IRS to confirm compliance with ACA regulations and prevent potential penalties.
When should I seek expert help with my Form 1120-S or ACA filings?
You should seek expert help if your company receives IRS notices, faces ACA reporting issues, or needs assistance with accumulated adjustments. A tax professional can review your business taxes, verify ACA compliance data, and file corrected forms. Expert help reduces risk and ensures that your corporation remains compliant with federal requirements.
