What Form 1120-S (2012) Is For
Form 1120-S (2012) is the annual federal income tax return an S corporation must file with the Internal Revenue Service. It reports the corporation’s profits, deductions, and credits that pass through to shareholders for personal reporting. This tax return ensures that the S corporation avoids double taxation, while each shareholder includes their share of the business income on their income tax return. The form applies to entities that have elected S corporation status and received IRS approval before the start of the fiscal tax year.
When You’d Use Form 1120-S (2012)
An S corporation must file Form 1120-S each tax year by the 15th day of the third month after the close of its fiscal year. Most calendar-year filers' due date falls on March 15, 2013. The return is due the next business day if that date falls on a weekend or legal holiday. S corporations can request a six-month extension by filing Form 7004, though this extension applies only to filing, not to paying any business taxes due. Even if the business had no income or activity, it must still file to meet IRS filing requirements.
Key Rules or Details for 2012
- Electronic Payment Requirement: All S corporations must make federal tax deposits electronically using EFTPS. The IRS no longer accepts paper checks for corporate or employment taxes.
- E-File Mandate: Corporations with $10 million or more in assets that filed 250 or more returns were required to e-file Form 1120-S. Smaller entities could file on paper or electronically.
- Food Inventory Deduction: For 2012, S corporations could claim enhanced deductions for donating food inventory to qualifying organizations, benefiting retail and food production companies.
- Capital Gains Reporting: The IRS required corporations to report sales and gains on Form 8949 before transferring totals to Schedule D, which ensured accurate investment income reporting.
- Recordkeeping Rule: S corporations must keep records for at least three years from the due date or filing date and property basis records until the property is sold or disposed of.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step Filing Process (High Level)
Step 1: Gather Financial Records
Collect detailed financial statements, including receipts, sales data, and expense records. Accurate information ensures that income, deductions, and credits are properly reflected in the tax return.
Step 2: Complete Form 1120-S Core Sections
Enter company information and employer identification number, and calculate ordinary business income. Include sales, cost of goods sold, and deductible business expenses following IRS instructions for this tax year.
Step 3: Prepare Schedules K and K-1
Complete Schedule K to summarize total income, deductions, and credits. Then prepare Schedule K-1 for each shareholder, listing their specific share of the corporation’s profits and losses for their personal income tax return.
Step 4: Reconcile and Review
Use Schedules L, M-1, and M-2 to reconcile book income to tax income and track accumulated adjustments. Confirm all totals match the financial statements before submission to avoid IRS penalties.
Step 5: Attach Required Forms and Schedules
The necessary forms are attached, including 1125-A for the cost of goods sold, 8825 for rental income, and 4136 for fuel credits. Please place all forms in the required order for complete and accurate filing.
Step 6: Sign, Date, and Submit
An authorized officer must sign and date the tax return. Depending on eligibility, you can mail or electronically submit the completed form to the correct IRS Service Center based on your business location.
Step 7: Provide Shareholder Copies
Each shareholder must receive their Schedule K-1 by the due date or the extended date. Shareholders in states like South Carolina, Virginia, and Ohio use these for state and federal income tax filings.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Filing Before S Election Approval: Ensure IRS approval of Form 2553 before submitting Form 1120-S. Filing early can cause rejection and processing delays.
- Leaving Blank Lines on the Form: Every applicable entry must be completed. Use attachments only when necessary to clarify details without omitting totals on the main form.
- Incorrect IRS Mailing Address: Check the latest IRS instructions for the correct mailing address. Locations vary by state, including Pennsylvania, Georgia, and Michigan.
- Missing or Incorrect Schedules: Each shareholder must receive an accurate Schedule K-1. Verify that totals match Schedule K and distribute all copies before the due date.
- Assuming an Extension Delays Payment: Filing Form 7004 only extends your filing deadline. Any taxes due must be paid by March 15 to avoid additional penalties.
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 submission, the Internal Revenue Service processes the form and verifies the schedules. Shareholders then report their income or losses from Schedule K-1 on personal returns. If an S corp filed late, the IRS may issue penalty notices, but taxpayers can request relief for reasonable cause.
Businesses in states like Massachusetts, Delaware, and Indiana should also check for state-level reporting obligations. Records should be kept for at least three years, as the IRS may review past returns. For ongoing support, corporations can contact the Taxpayer Advocate Service for assistance with unresolved issues.
FAQs
What is IRS Form 1120-S (2012), and who must file this tax return?
S corporations use IRS Form 1120-S (2012) to report their business income, deductions, and credits to the IRS. Every eligible S corporation must file this income tax return yearly, regardless of business activity.
When is the due date for filing an S corporation income tax return?
The due date for filing Form 1120-S falls on the 15th day of the third month following the close of the fiscal or calendar year. If the date falls on a legal holiday, it is due the next business day.
Can I e-file my SS Corptax return for 2012?
Yes, most taxpayers may e-file Form 1120-S. Under federal filing requirements, corporations with assets over $10 million or filing at least 250 returns must e-file, while smaller corporations can file electronically or on paper.
What are the penalties if my S corporation misses the filing due date?
The IRS may assess penalties for late filing or incomplete information. Generally, the penalty applies per shareholder monthly, up to twelve months, unless reasonable cause is demonstrated.
How do I amend my S corporation income tax return for 2012?
If you find an error, file a corrected IRS Form 1120-S and check the “Amended Return” box. Provide revised schedules and distribute corrected K-1s to shareholders for accurate income tax reporting.
What happens if the fiscal year or date falls on a weekend or legal holiday?
If your return falls on a holiday or a legal holiday, it is due the next business day according to every state's calendar and fiscal year for S corporations.
Which states have unique filing requirements for S corporations?
States such as South Carolina, Rhode Island, New Hampshire, and Maryland have additional filing requirements. Taxpayers should review state-specific instructions before filing their federal and state tax returns.
