What is an 1120-S? Do I need one?

An 1120-S is a tax document used to report the income, losses and dividends of S corporation shareholders. It's one of many tax forms that you can find on irs.gov. This particular form is only needed if you own a business. If you don’t own a business, you can skip this one. But not every business needs an 1120-S. So that’s where it gets tricky. Does your business need one? If you are an S-corp, then the answer is yes, but which one?

When I went to irs.gov and searched all tax forms and instructions I got over 2,000 results. When I narrowed it down to ‘1120’, there were 72 results, when narrowed down again to ‘1120-S’, I still had 11 options. Thankfully, there are instruction forms as well. I clicked on the instructions for the standard 1120-S form. It is 44 pages long and included a multitude of links to various other sites and pages. This could take days to read through, maybe longer. And to add the icing on the cake, the following statement has been copied and pasted from the 1120-S instructions from page 40. “The average burden for taxpayers filing Form 1120 and associated forms is about 610 hours and $26,233; and the average for Forms 1120-REIT, 1120-RIC, 1120S, and all related attachments is 363 hours and $12,467.”

What? I don’t know about you but I certainly don’t have 363 hours and $12,467 to spend on the this form. It’s unclear whether this burden includes personal tax forms as well, but let’s be honest, if it does, does that really make it any easier?

Feeling overwhelmed? I was! Don’t spend 363 hours trying to figure this out on your own. Let us help. 

There may possibly be other tax forms that your business needs to file aside from the 1120-S, such as an 1120, 1099, 1065, K-1, 990, or schedules C, E, or F just to name a few, that will most certainly have similar estimations in time and money spent. Our federal tax system can be incredibly confusing, especially if you’re a new business owner. It’s incredibly important that you ensure you have all the proper tax documents filed on time, including quarterly forms throughout the year. We highly recommend contacting an accountant or other tax expert to help make sure that your business is taken care of.