What IRS Form 1120-S (2017) Is For
IRS Form 1120-S (2017) is the U.S. Income Tax Return used by an S corporation to report its income, tax deductions, tax credits, and other tax items to the IRS. The form applies to tax years ending in 2017 and must be filed by any domestic corporation or eligible entity that elected S corporation status using Form 2553.
S corporations are pass-through entities, which means their profits, losses, deductions, and credits flow directly to shareholders’ individual tax returns through Schedule K-1. Each shareholder’s taxable income, interest, dividends, and capital gains are then reported on their personal tax return, allowing income to be taxed only once, rather than at both the corporate and individual levels.
Corporations with lapsed filings or missing prior-year submissions should review any unfiled 1120-S S corporation returns to avoid penalties or IRS compliance notices.
When You’d Use Form 1120-S for 2017 (Late or Amended Filing)
Corporations may need to file an amended return or a late tax return if they missed the March 15, 2018, filing deadline or received a notice from the IRS requesting verification or payment. Amended returns are used to correct taxable income, deductions, or shareholder allocations that affect investors and owners.
Although S corporations generally do not receive refunds, corrections may impact shareholders’ individual tax refunds or carry-forward tax credit balances. Businesses that paid excess tax or wages should file promptly to reduce penalties and ensure compliance with IRS rules. If you are unsure which forms or corrections apply when filing late or amending an S-corp return, the IRS Form Help Center provides guidance on required schedules and tax-year documentation.
Key Rules Specific to 2017
The 2017 tax year was notable because it was the final year under the previous law before the Tax Cuts and Jobs Act (TCJA) took effect. The TCJA increased limits for certain deductions and credits, effectively shifting how income and employment taxes are applied to partnerships and corporations.
- Section 199 Deduction Ended: The domestic production deduction under Section 199 was repealed, effective in 2018, as part of the new Jobs Act provisions.
- Late Filing Penalties: Penalties increased to the lesser of the unpaid tax or $210 for returns filed more than 60 days after the due date.
- Entertainment Expense Rules: Expenses for entertainment and similar costs were still deductible under the 2017 law, but they became subject to limitations under subsequent laws.
- Paid Family and Medical Leave Credit: Later provisions under the tax cuts introduced credits for paid family or medical leave, but these did not apply to 2017.
Businesses addressing penalties, shareholder allocation issues, or post-TCJA adjustments may benefit from reviewing available business tax relief programs designed to assist with IRS compliance.
Step-by-Step (High Level)
- Gather Records: Request 2017 account transcripts using Form 4506-T and collect financial statements, including business property, capital, cash, and asset information.
- Use the Correct Form: File the 2017 IRS Form 1120-S (not the current version) to report profits, expenses, and tax items accurately.
- Prepare Schedules: Include Schedule K-1 for each shareholder, ensuring details about income, deductions, and dividends are complete.
- Calculate Penalties: Determine late filing penalties or interest for unpaid taxes.
- File and Distribute: Mail the return to the IRS service center address listed in the instructions and provide K-1s to shareholders.
- Keep Records: Retain copies of the filed form, K-1s, and supporting schedules for at least three tax years.
If the corporation owes a balance after filing, you can apply for an IRS payment plan to extend repayment and prevent further enforcement actions.
Common Mistakes and How to Avoid Them
- Incomplete Lines: Avoid writing “See Attached” on key lines; provide full figures for income, deductions, and credits.
- Missing Schedule K-1s: Ensure that each shareholder receives a complete Schedule K-1 that shows all tax items.
- Incorrect S Election: Verify that the S corporation election (Form 2553) was accepted before filing.
- Improper Filing Order: Follow the IRS line sequence to prevent processing delays.
- Incorrect Preparer Details: Provide preparer and firm information if paid services were used.
- Omitting Disclosures: Include required foreign asset, trade, or real property disclosures.
Late, incomplete, or incorrect filings may trigger compliance notices or IRS follow-up. Reviewing the IRS collection process can help you understand what to expect if the IRS initiates action.
What Happens After You File
IRS processing for 2017 paper tax returns generally takes six to eight weeks. If late, penalties of $200 per shareholder per month (up to a maximum of 12 months) apply. Taxpayers may receive IRS notices for missing forms or unpaid tax bills.
If the corporation cannot pay immediately, it may request a payment plan using Form 9465. When the S corporation disagrees with assessed penalties, it can appeal by showing reasonable cause and providing more detailed information or documentation.
All submissions should include verification, the corporation’s employer identification number, and supporting documents. Keep copies for business and personal records.
FAQs
How much is the late filing penalty for my IRS Form 1120-S (2017) tax return?
The IRS penalty for a late S corporation tax return is $200 per shareholder per month, up to a maximum of 12 months. For returns filed more than 60 days late, the minimum penalty is $210 or the unpaid tax, whichever is smaller. These amounts can add up quickly, depending on the number of shareholders and the number of tax years affected.
How does IRS Form 1120-S (2017) affect taxable income and tax deductions?
IRS Form 1120-S (2017) reports income, deductions, and credits for an S corporation. The information flows to each shareholder’s individual tax return, adjusting their taxable income. Deductions for wages, business property, and interest must follow the 2017 law. Later changes under the tax cuts limited deductions for entertainment and personal expenses.
What changed under the Jobs Act and tax cuts for S corporation taxpayers?
The Tax Cuts and Jobs Act (TCJA) has significantly changed the calculation of taxable income. It lowered corporate rates, removed the domestic production deduction, and limited some business expense deductions. The TCJA increased the percentage for depreciation of capital assets and introduced qualified business income provisions for pass-through entities.
Can I request transcripts or amended returns for IRS Form 1120-S (filing year 2017)?
Yes. Businesses can request prior-year transcripts for verification using Form 4506-T. These show recorded income, deductions, and payments. If you need to correct errors, file an amended return. The process may take several weeks, and only limited electronic filing options are available for old tax years.
How are tax deductions and taxable income handled for the 2017 S corporation tax return?
Tax deductions reduce taxable income for 2017, based on business expenses, wages, and depreciation of assets. Capital gains, dividends, and investment profits must be reported. The previous law allowed certain deductions that are now limited under the TCJA. Accurate filing ensures taxpayers and partnerships comply with the law and avoid penalties.
