IRS Form 1120-S (2018): S Corporation Tax Return
What IRS Form 1120-S (2018) Is For
Form 1120-S is the U.S. Income Tax Return for an S Corporation, used to report income, gains, losses, deductions, credits, and other details for corporations with an accepted S corporation election via Form 2553 (IRS Instructions for Form 1120-S (2018)). Income and losses pass through to shareholders, who report them individually.
When You’d Use Form 1120-S for 2018 (Late or Amended Filing)
You’d file a late 2018 Form 1120-S if the IRS sent notices about unfiled returns, assessed penalties, or filed substitute returns on your behalf. Amended returns are needed if errors in income, deductions, or shareholder reporting were discovered. Refund claims generally expired in March 2022, making timely filings and amendments critical for compliance and penalty management.
Key Rules Specific to 2018
- First year under the Tax Cuts and Jobs Act (TCJA), with changes like Section 199A QBI deduction applying at the shareholder level.
- Late filing penalty was $200 per shareholder per month, up to 12 months maximum.
- Proper shareholder compensation remained required.
- Maintaining the Accumulated Adjustments Account (AAA) was essential for correct distribution reporting.
Step-by-Step (High Level)
- Gather tax transcripts from IRS.gov or by calling 800-908-9946.
- Complete the 2018 Form 1120-S with all required schedules, including Schedule K and K-1s.
- Attach statements for amended returns detailing line changes and reasons.
- Prepare and distribute K-1s for all shareholders.
- File electronically if required, or mail to the IRS service center.
- Keep full copies of returns and supporting documents.
Common Mistakes and How to Avoid Them
- Not paying reasonable compensation to shareholder-employees.
- Errors in AAA calculations for corporations with prior C corporation earnings.
- Missing or inaccurate Schedule K-1s for shareholders.
- Miscalculating late penalties by failing to multiply by shareholder count.
- Confusing superseding vs. amended returns.
- Failing to attach required amendment explanations or documentation.
What Happens After You File
The IRS usually processes returns in 8–12 weeks, though amended returns often take longer. Notices may confirm receipt, request additional information, or assess penalties. Payment plans can be requested using Form 9465 if balances are due. Refund-related amendments face closer review. You retain appeal rights for disputes, including adjustments, penalties, or rejected amendments.
FAQs
Can I still file my 2018 S corporation return even though it’s years late?
Yes. The IRS accepts late S corporation returns, but penalties apply. The 2018 penalty was $200 per shareholder per month, up to 12 months. Filing now won’t erase penalties already assessed but stops new ones from accruing. Compliance also reduces the risk of further enforcement actions, such as liens or levies.
What’s the penalty for late filing my 2018 Form 1120-S?
The penalty is $200 per month, multiplied by the number of shareholders, up to 12 months. For example, a two-shareholder S corporation would owe $400 monthly, capped at $4,800 if filed late. This penalty applies even if the corporation had no taxable income, since it’s assessed per shareholder, not per tax liability.
How do I get transcripts to understand what the IRS has on file for 2018?
You can request transcripts online at IRS.gov, by calling 800-908-9946, or by filing Form 4506-T. Corporate transcripts include account history, penalties, and prior filings. These records are crucial for identifying discrepancies, penalties already applied, and whether the IRS generated substitute returns. Having transcripts helps ensure accuracy when filing late or amended returns.
Can I still get a refund if I’m filing my 2018 return late?
Generally no. Refunds must be claimed within three years of the due date—March 15, 2022, for 2018 calendar-year S corporations. That deadline has passed, so refund claims aren’t valid. However, filing remains necessary to correct IRS records, provide shareholders with accurate K-1s, and stop penalties from compounding, even if refunds are unavailable.
Should I amend my state S corporation return if I’m amending federal?
Yes. Most states require amended returns whenever federal returns are amended, especially if changes affect state taxable income. Each state sets its own deadlines and procedures, so you should confirm requirements directly with your state tax agency. Ignoring state amendments can lead to mismatches, penalties, or audits at the state level.
What if I discover I wasn’t eligible to be an S corporation in 2018?
If eligibility requirements weren’t met, you may need to file as a C corporation using Form 1120 instead. Relief provisions may allow late corrections or reinstatements of the S election, depending on circumstances. Review IRS eligibility rules closely and consult professional guidance to determine the appropriate corrective actions for your corporation’s status.
Do I need to file even if the S corporation had no income in 2018?
Yes. Filing Form 1120-S is required regardless of income, as S corporations must file annually unless formally terminated or exempt. Even with no income, penalties apply if the return isn’t filed—assessed at $200 per shareholder per month. Filing protects compliance history and prevents unnecessary issues with the IRS.
