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Form 1120-S (Schedule K-1) and Form 1120: Basics

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Schedule K-1 Federal Tax Form: What Is It and Who Is It For?

This form can be obtained only by the individual(s) who are the partners or shareholders, or the corporation's shareholders, and should only be used in special situations where the total tax paid on the income would exceed the tax allowable by federal or state law. Schedule K-1 is not required for partnerships or S corporations. The IRS uses these forms to verify income and the amount of taxes received as explained in IRS Publication 4681, Business Income Tax and Publication 1465, Taxes Shareholders Must Report. Schedule K-1 is generally not accepted by employers, except when the requirements are met to determine your share of federal income taxes. If the amount of earnings exceeds the amount allowable, your tax responsibility will be calculated in the same tax code as your employer's tax return from which you received your wages. If you are not sure which tax code applies to you, and you haven't done your own estimate, contact us for an estimate or call the IRS at 1-800-TAX-FORM (). What Is the Purpose of My Schedule K-1? While you can use Schedule K-1 to report your profits or losses, that only describes the income and loss from your business. In order to pay certain taxes that can be determined by using the information contained in Schedule K-1, you must fill out additional information on a tax form. For more information, read, “Form 1040 Instructions,” and Publication 1320. If you do not have any federal income tax liability and haven't done your own estimate and have already filed a Schedule K-1, fill out the supplemental schedule K-1. A certified copy of the supplemental schedule K-1 must be included with your Form 1040 when returned to the IRS. The supplemental schedule K-1 should include your federal and state income tax liabilities and tax payments. Also, include information about the sources of your taxable income. The supplementary schedule K-1 must be completed on Schedule K-1. If your spouse(s) is involved in your trade or business, you must include a separate schedule K-1. Your partner or shareholder should complete the supplemental schedule K-1 and send it to the partnership or to the S corporation. If you have a spouse who is not involved in the trade or business, send him or her your Form 1040B. Your spouse must send the form to the partnership, S corporation, or LLC.

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Form 1120-S: U.S. Income Tax Return for an S Corporation Definition

This form is sent to the Internal Revenue Service (IRS). These schedules can be used to: determine whether there is an election to include S corporation share of income by shareholders of the corporation, and Determine how dividends of the corporation and its shareholders are treated. If an S corporation is treated as a partnership for federal income tax purposes, Form 1120-S also requires information about the partnership's income, deductions, and credits. This information should be listed on Part III. If an S corporation is a personal service corporation (PSC) for federal income tax purposes, Form 1120-S also requires information about the corporation's income, deductions, and credits. This information should be listed on Part III. What if the information on the Schedule A is incorrect? If your Schedule A doesn't give the correct information, we will apply the following adjustments and provide notice of your corrections. If the corrected information doesn't affect the corporation's income tax, we'll include it in the return. If the amended information affects the corporation's federal tax liability, we'll apply either of the following: a) the modified adjusted gross income of the corporation, or b) the corporation's income amount on the Form 1120. If either of the adjustments above applies, no notice should be sent. Corrected return with income amount in effect Before we send a corrected return you must receive the following information. The following information must be found on the corrected return: Your corrected income tax return. Your corrected Form 1120-S. This item lists any adjustments that affect your income tax. You must have your corrected Form 1120-S if you haven't received it yet. The date the schedule is due. Any return received after that date but before the due date of the amended return may not be accepted. Corrected schedule Schedule A Corrected return without income amount on Form 1120-S Form 1120-S may be filed by completing the Form 1120. If a return is missing some or all of the information required on the form, or it's incorrect because of a typographical error, we may not fill the entire form. Therefore, our procedures for completing Schedule A depend on the return missing some or all of the required information. If we find that the return is missing any of the information on Schedule A, we won't make any of the adjustments listed on this form, even if the additional information required is on the form.

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