Form 1120S (2012) S Corporation Filing Checklist

Instructions for Form 1120S 2012 Checklist

Overview of Form 1120S for Tax Year 2012

S corporations use Form 1120S for tax year 2012 to report income, losses, deductions, and credits that pass through to shareholders. The corporation generally does not pay federal income tax at the entity level because shareholders report their share of income on their individual returns. The filing includes Schedule K as part of the return and a Schedule K-1 prepared for each shareholder.

Although the overall pass-through structure remains consistent, the 2012 instructions include year-specific updates that affect reporting and disclosure. These updates include changes to

Schedule B questions and the continued availability of certain charitable contribution provisions for qualifying food inventory. No provisions from later laws, such as the Tax Cuts and Jobs Act, apply to this tax year.

Core Principles of S Corporation Reporting

An S corporation must qualify as a small business corporation for the entire tax year to file Form

1120S. Eligibility depends on shareholder type, shareholder count, and whether a valid S election exists. Losing eligibility during the year can terminate the S election as of the date the requirements are no longer met.

Income and deductions are computed at the corporate level in accordance with standard tax accounting rules. Certain items must be reported separately because they affect shareholders differently, while other items combine into ordinary business income or loss. Shareholders apply limitations, such as basis and passive activity rules, on their individual returns.

Shareholder Allocations and Schedule K-1 Use

Shareholder allocations generally follow a per-share, per-day approach for the period each shareholder owned stock during the year. This rule applies unless a permitted method applies due to ownership changes. Accurate allocations depend on tracking ownership throughout the year rather than relying solely on year-end information.

Schedule K-1 communicates each shareholder’s share of corporate activity. The schedule reports ordinary income or loss, separately stated items, distributions, and other required information. Each shareholder must receive a Schedule K-1 by the due date of the corporation’s return, including any extensions.

Records Required to Support the Return

Preparing Form 1120S requires records that support income, deductions, payroll, and shareholder reporting. These records must align with the corporation’s books and with tax definitions applicable to 2012. Differences between book income and taxable income require reconciliation using the appropriate schedules.

Employment tax records also support the return, particularly when wages paid to officers or employees affect deductions or credits. All supporting documentation should remain consistent across federal filings completed for the year.

Ten-Step Filing Checklist for Form 1120S 2012

1. Step 1: Compile Shareholder and Corporate Records

   Gather records related to shareholders and corporate operations. Include Forms W-2 issued to employees, Forms 1099-MISC for nonemployee compensation, prior-year Schedule K-1s, and documentation of shareholder capital contributions and distributions. These records support allocation calculations and disclosure requirements.

2. Step 2: Prepare Schedule K-1 for Each Shareholder

   Complete Schedule K-1 for every shareholder who owned stock during the year. Report each shareholder’s allocable share of income, loss, deductions, and credits based on ownership during the year. Provide each Schedule K-1 to the shareholder by the date the Form 1120S return is required to be filed, including extensions.

3. Step 3: Determine Whether Schedules L and M-1 Are Required

   Review total receipts and total assets at year's end. The corporation is not required to complete

   Schedules L and M-1 only if total receipts for the year were less than $250,000 and total assets at year's end were less than $250,000. If either threshold is met or exceeded, complete the required schedules.

4. Step 4: Confirm Shareholder Eligibility Requirements

   Verify that all shareholders were eligible S corporation shareholders during the year.

   Nonresident alien individuals are not eligible shareholders. If a nonresident alien becomes a shareholder, the S election may terminate as of that date, subject to potential relief if applicable requirements are satisfied.

5. Step 5: Address Passive Activity Items

   Report passive activity income, losses, and credits on Schedule K as required. The corporation reports these amounts without applying shareholder-level limitations. Shareholders apply their own passive activity limitation rules when reporting these items on individual returns.

6. Step 6: Complete Schedule B and Schedule K Correctly

   Complete Schedule B, Other Information, by answering all required questions accurately. Report items requiring separate shareholder treatment on Schedule K and on each Schedule K-1. Use attachments only when instructions require additional detail for separately stated items.

7. Step 7: Report Depreciation and Asset Dispositions

   Report depreciation and amortization on Form 4562 when required and attach it to the return.

   Report gains or losses from asset dispositions using the appropriate forms and schedules. Pass through resulting income or loss items to shareholders through Schedule K and Schedule K-1 as applicable.

8. Step 8: Apply Pro Rata Allocation Rules

   Allocate income, loss, deductions, and credits pro rata among shareholders based on shares owned during the year. S corporations do not use partnership-style special allocations. Non-pro rata distributions or allocations can raise compliance concerns, including issues related to a second class of stock.

9. Step 9: Review Entity-Level Tax Exposure

   Determine whether the corporation owes any entity-level taxes for 2012. These taxes may include the built-in gains tax or excess net passive income tax. Consider estimated tax payment and underpayment rules only if applicable entity-level taxes apply and meet the required thresholds.

10. Step 10: Assemble, Sign, and File the Return

    Assemble the return following the 2012 instructions for assembling Form 1120S. Attach schedules and forms in the order specified after page 5 of the return. An authorized corporate officer must sign and date the return, and a paid preparer must complete and sign the Paid

    Preparer Use Only section if applicable.

    Year-Specific Updates for Form 1120S 2012

    The 2012 instructions include updates that affect disclosure and reporting. Additional questions were added to Schedule B, requiring corporations to provide more detailed information. The

    instructions also clarify that gross receipts from payment cards and third-party network payments are not separately reported on Form 1120S.

    The increased charitable deduction for certain food inventory contributions remained available for qualifying contributions made after 2011 and before 2014. These changes apply specifically to 2012 filings and must be reflected accurately when completing the return.

    Filing Addresses and Final Review

    For paper filings, the correct mailing address depends on the corporation’s principal business location and total assets. Addresses may also change if Schedule M-3 is required. Tax professionals should always confirm the correct address using the Where To File table in the

    2012 instructions before they submit the return, especially as tax deadlines approach.

    Before the filing deadline, review the return for accuracy and completeness. Confirm that

    Schedule K totals match Schedule K-1 amounts, all required schedules are attached, and shareholder information reflects ownership during the year. A careful review helps reduce errors, avoid delays, and limit interest caused by late or incorrect filings.

    If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.