What IRS Form 1120-S (2024) Is For
IRS Form 1120-S (2024) is the U.S. Income Tax Return for an S Corporation, used to report income, deductions, and credits for federal tax purposes. A domestic corporation that elects S corporation status uses this form to report income, gains, losses, and other tax information. S corporations are pass-through entities that do not pay income tax at the entity level. Instead, shareholders pay taxes on their share of corporate income through their personal tax returns. This structure helps avoid double taxation, unlike C corporations, which pay income tax at both the corporate and shareholder levels.
When You’d Use Form 1120-S for 2024 (Late or Amended Filing)
You would file IRS Form 1120-S (2024) late or as an amended tax return when corrections are needed or when the corporation missed filing deadlines. Common reasons include receiving IRS notices for unfiled returns, discovering errors that affect deductions and credits, or needing to issue corrected Schedule K-1s to shareholders.
The 2024 tax year deadline is March 17, 2025, since March 15 falls on a Saturday. Late filings may result in a penalty per shareholder. Refund claims generally must be filed within three years of the original due date. If you overpaid taxes, timely filing ensures that you can recover the excess amount. These rules apply to both electronic and paper returns filed with the IRS.
Key Rules Specific to 2024
For the 2024 taxable year, penalties have increased for late or incorrect filings. The minimum late-filing penalty is $510 for returns filed more than 60 days after the due date. Each shareholder is subject to a $245 per month penalty for up to 12 months. S corps that file 10 or more returns of any kind must e-file Form 1120-S.
Additional penalties apply for missing or incorrect Schedule K-1s. The penalty for failing to furnish each K-1 is $330, doubling for intentional disregard. These penalties underscore the importance of accurately reporting net income, deductions, and credits in accordance with federal tax laws and regulations.
For complete details on wage reporting, withholdings, and unemployment tax filings, see our guide to Business Income Tax Forms.
Step-by-Step (High Level)
- Gather IRS Account Transcripts: Obtain transcripts from the IRS or financial institutions to verify prior filings, penalties, and payments.
- Complete the 2024 Form 1120-S: Use the correct tax year form and report all income, deductions, and credits. Do not write “See Attached” in place of entries.
- Prepare Required Schedules: Include Schedule K and Schedule K-1s for shareholders. Mark “Amended K-1” if revising prior filings.
- Check Boxes on Page 1: Indicate whether it’s an amended return or a late return, and include explanations.
- Choose a Filing Method: E-file as required or mail to the correct IRS address for your corporation’s location.
- Keep Complete Records: Maintain signed copies, delivery confirmations, and supporting documents for compliance purposes.
Common Mistakes and How to Avoid Them
- Filing Before S Election Approval: Wait until the IRS confirms acceptance of the Form 2553 election before filing.
- Ignoring Reasonable Compensation: Officer-shareholders must receive wages subject to Social Security and Medicare taxes before taking distributions.
- Leaving Entry Fields Blank: Fill in all required fields to ensure the IRS can accurately calculate tax amounts.
- Incorrect Schedule K-1s: Issue accurate K-1s to shareholders on time to prevent penalties and reporting mismatches.
- Unsigned Returns: A corporate officer must sign the tax return to validate filing.
- Improper AAA Tracking: Track the Accumulated Adjustments Account accurately to calculate distributions and prevent tax errors.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
After you file IRS Form 1120-S (2024), e-filed returns are generally processed within 21 days, while paper filings take longer. The IRS will send acknowledgments or notices if there are discrepancies. If you owe taxes, you may pay through electronic transfers or request an installment plan using Form 9465.
Shareholders report their share of S corporation profits, losses, deductions, and credits on their individual income tax returns. If the IRS determines adjustments are needed, you may appeal before court action. Amended returns can also affect state-level filings, as many states require corresponding amendments for state tax purposes.
FAQs
How much is the late filing penalty for IRS Form 1120-S (2024)?
The penalty for late filing is $245 per shareholder per month, up to a maximum of 12 months, plus a minimum penalty of $510 if the return is more than 60 days late. These penalties apply even if no income tax is owed, so timely filing is critical for every S corporation.
Can I obtain account transcripts to help me file my income tax return?
Yes, you can request transcripts through IRS Form 4506-T or your IRS online account. These show net income, penalties, payments, and interest, helping you ensure accurate completion of your S corporation tax return for the correct taxable year.
Do pass-through entities, such as S corporations and partnerships, pay income tax on the income they generate?
Pass-through entities, including S corporations and partnerships, generally do not pay income tax at the entity level. Instead, they pass corporate income to shareholders or partners, who pay income tax on their personal returns. This structure helps avoid double taxation that affects C-corp owners.
What are the key differences between an S corporation and a C corporation?
S corporations are designed to avoid double taxation by passing profits directly to shareholders, whereas C corporations pay taxes at both the corporate and shareholder levels. S corporations must have only one class of stock and limited owners, while C corporations allow different types of stock and can attract a broader range of investors.
How does an S corporation report profits and net income for tax purposes?
An S corporation reports its net income, deductions, and credits on Form 1120-S. Each shareholder receives a Schedule K-1 to include on their individual income tax return. This process ensures that income, dividends, and deductions are correctly distributed and reported to the IRS.
