What IRS Form 1120-S (2025) 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 tax information for entities with an approved S corporation election (IRS Instructions for Form 1120-S, 2024). It must be filed annually, even if the corporation had no activity, as S corporations are pass-through entities.

When You’d Use Form 1120-S for 2025 (Late or Amended Filing)

You must file Form 1120-S for 2025 if you missed the March 17, 2025 deadline and failed to request an extension, received IRS notices demanding the return, or discovered errors requiring corrections. Penalties are steep—$245 per shareholder per month (up to 12 months). Amended filings may also be required to issue corrected Schedule K-1s.

Key Rules Specific to 2025

• Minimum late filing penalty increased to $510 or the tax due, whichever is smaller.
  
  
• Standard late filing penalty is $245 per shareholder per month (up to 12 months).
  
  
• If the 2025 form is not yet released, corporations must use the 2024 form and indicate “2025” at the top.
  
  
• Schedules K-2 and K-3 are required for international reporting unless an exemption applies.
  
  

Step-by-Step (High Level)

• Gather records: Request transcripts from IRS.gov or call 1-800-908-9946.
• Complete the form: Use the 2025 Form 1120-S, checking “Amended Return” when applicable.
• Attach required schedules: Include all K-1s, K-2/K-3 (if required), and explanatory statements.
• Submit return: E-file if filing 10+ returns annually; otherwise, mail to the proper IRS center.
• Maintain records: Keep all documents and proof of submission for at least four years.

Common Mistakes and How to Avoid Them

• Shareholder data errors: Double-check SSNs, names, and ownership percentages on K-1s.
  
  
• AAA miscalculations: Mistakes on Schedule M-2 affect taxability of distributions.
  
  
• Ignoring reasonable compensation: Shareholder-employees must receive wages subject to payroll tax.
  
  
• Incorrectly classifying pass-through items: Ensure items like capital gains and charitable contributions are separately stated.
  
  
• Late filing without extension: File Form 7004 by March 17 to avoid penalties.
  
  
• Skipping K-2/K-3: Required for corporations with international tax items.
  
  

What Happens After You File

The IRS processes e-filed returns in 2–3 weeks and paper returns in 6–8 weeks. Notices may be issued if errors are found or penalties apply. If you cannot pay assessed amounts, request an installment agreement using Form 9465. Appeals can be filed within 30 days of notices. Monitor your business tax account for updates.

FAQs

How long do I have to file a late Form 1120-S without additional penalties?

There is no grace period. Penalties begin the day after the due date and accrue monthly at $245 per shareholder, up to 12 months. Filing promptly limits financial damage, as penalties are assessed whether or not the corporation owes tax. Address missing filings quickly to stop further accrual.

Can I e-file an amended Form 1120-S for 2025?

Yes, amended S corporation returns can be e-filed. Mark the “Amended Return” box on page one and “Amended K-1” on each corrected Schedule K-1. E-filing ensures faster processing than paper filing, reduces errors, and provides electronic confirmation. IRS-approved software is required for electronic amended submissions.

If I file late, do shareholders need to amend their individual returns?

Not always. If shareholder K-1s remain unchanged, amendments aren’t necessary. However, if the late or amended return produces different allocations of income, losses, deductions, or credits, affected shareholders must amend their personal returns using Form 1040X. Promptly issuing corrected K-1s ensures compliance and avoids compounding penalties.

What’s the penalty if my S corporation owes no tax but filed late?

Even with no tax owed, penalties apply. The IRS charges $245 per shareholder per month, capped at 12 months, for late information returns. For example, three shareholders six months late equals $4,410 in penalties. Filing on time is crucial regardless of income or tax due, as penalties are per shareholder.

How do I get IRS transcripts to help prepare my late return?

You can request transcripts online at IRS.gov, call 1-800-908-9946, or file Form 4506-T. Transcripts provide account activity, balances, penalties, and return history, which help ensure accuracy when preparing late or amended filings. Having this information prevents duplication errors and helps reconcile IRS records with corporate books.

Can I request a payment plan for S corporation penalties and interest?

Yes, you can request a payment plan if you cannot pay immediately. File Form 9465 or apply online for installment agreements. Generally, plans are approved if balances are under $50,000. Payments can be spread over time, but interest and penalties continue accruing until full payment is made.

Is there a statute of limitations for filing unfiled S corporation returns?

No. The IRS can assess penalties and require unfiled S corporation returns indefinitely. Filing begins the statute of limitations clock for audits, which is typically three years. Until a return is filed, penalties accrue, and there is no closure. Filing even late helps limit exposure and starts statutory protections.

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