Schedule K-1 (Form 1120S) is a critical tax document prepared by S corporations when filing their annual return using Form 1120-S. This form, also known as the 1120S K-1, is issued to each shareholder to report their share of the corporation’s income, deductions, credits, and other financial items. Shareholders use this information to complete their individual tax returns (Form 1040).
Understanding the Schedule K-1 Form 1120S
The Schedule K-1 Form 1120S is divided into three main parts:
Part I – Information About the Corporation
This section includes basic details about the S corporation:
- Name
- Address
- Employer Identification Number (EIN)
Part II – Information About the Shareholder
This section provides:
- Shareholder’s name and address
- Type of shareholder
- Percentage of stock ownership during the tax year
Part III – Shareholder’s Share of Current Year Income, Deductions, Credits, and Other Items
This section outlines the shareholder’s allocated portion of:
- Ordinary business income
- Rental income
- Interest, dividends, and capital gains
- Deductions and credits
Instructions 1120S and Entry Guidance
To accurately report your Schedule K-1 1120S, it’s essential to review the official Instructions 1120S provided by the IRS. These instructions help interpret the figures and codes on the K-1 and guide you on how to report them on your personal tax return.
Additionally, refer to any instructional materials provided by the corporation along with your Schedule K-1 Form 1120S.
Program Entry: How to report your 1120S K-1
To enter your 1120S K-1 in the tax software:
-
Navigate to:
- Federal
- Income (Select My Forms)
- Less Common Income
- K-1 Earnings
- Schedule K-1 Form 1120S
- Use the dedicated K-1 input menu to enter the amounts from your form. The software will automatically transfer the data to the appropriate lines on your return.
⚠️ Some items may require manual entry into specific forms or schedules, depending on the nature of the income or deductions and any elections made by the taxpayer.
Additional Information
If your Schedule K-1 tracking 1120S includes items not supported directly in the program’s K-1 entry screen, consult the IRS instructions or your tax advisor to determine the correct reporting method.
NOTE: This is a guide on entering Schedule K-1 (Form 1120-S) into the tax program. This is not intended as tax advice.