Instructions for Form 1120S - Introductory Material


Future Developments

For the latest information about developments related to Form 1120S and its instructions, such as legislation enacted after they were published, go to  
www.irs.gov/form1120s.

What's New

Simplified and expanded relief for late elections.   Rev. Proc. 2013-30 provides new simplified methods for a corporation (entity) to request relief for a late S corporation election, ESBT election, QSST election, or corporate classification election. For details, see the Instructions for Form 2553.

Information reporting requirements for health insurance offers and coverage.   Under the Affordable Care Act, employers that offer (or fail to offer) and others that provide minimum essential coverage to individuals are required under sections 6055 and 6056 to provide certain information to the IRS and to the individuals. The information is required for calendar years beginning after December 31, 2014, but may voluntarily be filed with the IRS and provided to individuals for 2014. For more information, see the final regulations under sections 6055 and 6056. Also, for information related to the Affordable Care Act, visit www.irs.gov/ACA.

Deduction and capitalization of expenditures related to tangible property.   Final regulations under sections 162(a) and 263(a) provide guidance for taxpayers that acquire, produce, or improve tangible property. The final regulations clarify and expand the standards of previous regulations under sections 162(a) and 263(a). The regulations generally apply to tax years beginning after 2013. However, certain provisions may retroactively be applied to tax years beginning after 2011. See T.D. 9636, 2013-43 I.R.B. 331, at www.irs.gov/irb/2013-43_IRB/ar05.html.

Schedule M-3.   For tax years ending December 31, 2014, and later, Form 1120S filers that (a) are required to file Schedule M-3 (Form 1120S), Net Income (Loss) Reconciliation for S Corporations With Total Assets of $10 Million or More, and have less than $50 million total assets at the end of the tax year or (b) are not required to file Schedule M-3 (Form 1120S) and voluntarily file Schedule M-3 (Form 1120S), must either complete Schedule M-3 (Form 1120S) entirely or complete Form 1120S, Schedule M-1, instead of completing Parts II and III of Schedule M-3 (Form 1120S). These filers are not required to file Form 8916-A, Supplemental Attachment to Schedule M-3. If these filers choose to complete Form 1120S, Schedule M-1, instead of completing Parts II and III of Schedule M-3 (Form 1120S), line 1 of Form 1120S, Schedule M-1, must equal line 11 of Part I of Schedule M-3 (Form 1120S). See Item C. Schedule M-3 Information and Schedule M-1. Reconciliation of Income (Loss) per Books With Income (Loss) per Return, later in the instructions.

Online payment agreement.   The corporation may be able to apply for an installment agreement online if it has a balance due when the corporation's return is filed. See the instructions for line 25.

Activity-based reporting.   The instructions have been clarified for activity-based reporting. See Passive Activity Reporting Requirements and Specific Instructions (Schedules K and K-1, Part III).

Reminders

Election by a small business corporation.   Do not file Form 1120S unless the corporation has filed or is attaching Form 2553, Election by a Small Business Corporation. For details, see the Instructions for Form 2553.

Schedule K-1 (Form 1120S).   Box 17, code U is used to report information related to the net investment income tax.

Regulations section 1.1411-10(g) election.   The corporation can elect to include section 951 inclusions and section 1293 inclusions in net investment income for purposes of section 1411 in the same tax year as the amounts are included in income for chapter 1 purposes. See Regulations section 1.1411-10(g) (section 1411 election with respect to CFCs and QEFs) under Other Forms and Statements That May Be Required for more information.

Photographs of Missing Children

The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in these instructions on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Unresolved Tax Issues

The Taxpayer Advocate Service (TAS) is your voice at the IRS. Its job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. TAS offers free help to guide you through the often-confusing process of resolving tax problems that you haven't been able to solve on your own. Remember, the worst thing you can do is nothing at all.

As a taxpayer, the corporation has rights that the IRS must abide by in its dealings with the corporation. The TAS tax toolkit at www.taxpayeradvocate.irs.gov/ can help the corporation understand these rights.

TAS can help the corporation if:

  • A problem is causing financial difficulty for the business.

  • The business is facing an immediate threat of adverse action.

  • The corporation has tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised.

TAS have offices in every state, the District of Columbia, and Puerto Rico. Local advocates' numbers are in their local directories and at www.irs.gov/Advocate/Local-Taxpayer-Advocate. The corporation can also call TAS at 1-877-777-4778.

TAS also handles large-scale or systemic problems that affect many taxpayers. If the corporation knows of one of these broad issues, please report it to us through the Systemic Advocacy Management System at www.irs.gov/sams.

For more information, go to www.irs.gov/advocate.

Direct Deposit of Refund

To request a direct deposit of the corporation's income tax refund into an account at a U.S. bank or other financial institution, attach Form 8050, Direct Deposit of Corporate Tax Refund. See the instructions for line 27.

How To Get Forms and Publications

Internet.   You can access the IRS website 24 hours a day, 7 days a week, at IRS.gov to:
  • Download forms, instructions, and publications;

  • Order IRS products online;

  • Research your tax questions online;

  • Search publications online by topic or keyword;

  • View Internal Revenue Bulletins (IRBs) published in recent years; and

  • Sign up to receive local and national tax news by email.

Tax forms and publications.   The corporation can download or print all of the forms and publications it may need on www.irs.gov/formspubs. Otherwise the corporation can:
  • Go to www.irs.gov/orderforms to place an order and have forms mailed to it, or

  • Call 1-800-829-3676 to order current year forms, instructions, publications and prior year forms and instructions (limited to 5 years).

The corporation should receive its order within 10 business days.


More Online Instructions