IRS Form 1120-S (2025): S Corporation Tax Return
What IRS Form 1120-S (2025) Is For
IRS Form 1120-S (2025) is the U.S. Income Tax Return for an S Corporation, used to report corporate income, losses, deductions, and credits for corporations that elect to pass corporate income, losses, deductions, and credits directly to shareholders. Each shareholder reports their share on personal tax returns, paying income tax at their individual income tax rates.
Corporations that elect S Corporation status must file an annual return with the Internal Revenue Service. The filing requirements apply even if the corporation had no activity, since these entities are treated as pass-through for federal tax purposes. Filing ensures corporations avoid double taxation on the corporate level because income flows through to individual shareholders.
When You’d Use Form 1120-S for 2025 (Late or Amended Filing)
Corporations are responsible for tax reporting under the proper tax year. You must file Form 1120-S for 2025 if you missed the March 17, 2025, due date, failed to request an extension, or received an IRS notice. The failure to pay a penalty applies even if the corporation owes no tax. If errors are found later, you must file an amended tax return and issue corrected Schedule K-1s to shareholders.
The standard penalty for a late filing is $245 per shareholder per month, up to 12 months. For 2025, the minimum penalty increased to $510 or the tax due, whichever is smaller. Corporations that elect to pass corporate income but file late may still face these penalties.
For complete details on wage reporting, withholdings, and unemployment tax filings, see our guide to Business Income Tax Forms.
Key Rules Specific to 2025
- Penalty Adjustments: The minimum late filing penalty is $510 or the tax due, whichever is smaller.
- Form Availability: If the 2025 form is not yet released, corporations must use the 2024 IRS form and write “2025” at the top.
- Schedules K-2 and K-3: The filing requirements for schedules K and K-2 apply to corporations with foreign income, partnerships, or other international items.
- E-Filing Requirement: Corporations required to e-file their forms must use IRS-approved software to comply with e-file information requirements.
- Special Entities: Certain trusts and estates, financial institutions, insurance companies, and domestic international sales corporations may have additional filing requirements or exceptions.
Step-by-Step (High Level)
- Gather Records: Request transcripts from IRS.gov or call 1-800-908-9946. These records help determine the corporation's income, deductions, and prior-year filings.
- Complete the Form: Use IRS Form 1120-S (2025) and check “Amended Return” when needed. Include all income, losses, deductions, and credits.
- Attach Required Schedules: Include K-1s, K-2/K-3, and any explanatory statements to reflect the flow-through of income.
- Submit the Return: E-file their forms if filing 10 or more annually; otherwise, mail to the correct IRS service center.
- Maintain Records: Keep forms, proof of filing, and schedules for at least four years for review or future audits.
Common Mistakes and How to Avoid Them
- Incorrect Shareholder Data: Verify SSNs, names, and ownership percentages for all shareholders.
- Schedule M-2 Errors: Avoid miscalculations that affect distributions and taxation on the corporate level.
- Ignoring Compensation Rules: Shareholder-employees must report wages subject to Social Security and Medicare taxes, as well as income tax withholding.
- Omitting Schedules K-2/K-3: Required for corporations with foreign operations, certain trusts, or estates.
- Late Filing: File Form 7004 by the due date to prevent penalties and maintain compliance with filing requirements.
- Ineligible Corporations: Certain financial institutions, insurance companies, and domestic international sales corporations do not qualify for S Corporation status.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
The Internal Revenue Service processes e-filed returns within two to three weeks and paper returns in six to eight weeks. Corporations are responsible for tax accuracy, and returns are assessed for errors. If the IRS determines that tax is due or adjustments are necessary, corporations may be liable for interest or penalties.
If payment cannot be made immediately, file Form 9465 to request an installment agreement. This helps corporations manage their obligations and avoid additional penalties. Corporations that fail to pay may still be responsible for the tax assessed, even if the business owes no income tax.
Corporations should monitor their business tax account online using the locked padlock icon for secure access. Ensure you use official IRS websites when accessing or uploading financial data.
FAQs
What is IRS Form 1120-S (2025) used for in an S Corporation tax return?
S corporations use IRS Form 1120-S (2025) to report income tax, gains, and deductions. Corporations report the flow of these amounts to shareholders for federal tax purposes. Shareholders then report their share on personal tax returns at their individual income tax rates.
What are the filing requirements for schedules K and K-2 with Form 1120-S?
The filing requirements for schedules K and K-2 apply to S corporations with foreign income, partnerships, or certain built-in gains. These schedules help corporations report income, losses, and credits, especially from international activities, to ensure full compliance with the IRS form requirements.
How do I file IRS Form 1120-S if I missed the due date?
If you missed the due date, file the required tax return as soon as possible. Use the proper filing form for your tax year and include all schedules. Filing quickly limits the failure-to-pay penalty and reduces exposure to additional interest or enforcement actions from the IRS.
What are the filing requirements for an S Corporation under IRS Form 1120-S?
Corporations that elect S Corporation status must meet filing requirements to pass corporate income, losses, and deductions through to shareholders. The status the corporation must maintain includes one class of stock and eligible shareholders. Certain financial institutions, insurance companies, and partnerships do not qualify for S Corporation treatment.
Do I need to include Schedule K-2 with my 2025 S Corporation tax return?
Yes, if your corporation has international transactions, foreign partnerships, or gains and passive income, you must include schedules K and K-2. These schedules help corporations report income, credits, and deductions accurately for federal tax purposes. Review separate instructions for Schedules K-2 to ensure compliance.
