Guide · 2026 rules
Form 1120-S: the S corporation’s own return
An S corporation files its own federal return every year, Form 1120-S, even though it usually pays no federal income tax. The return works out the business’s profit and passes each owner’s share to them on a Schedule K-1. Here is what that means for a one-owner business.
In short
- Form 1120-S reports the S corporation’s income, deductions and credits for the year.
- Your salary is deducted on line 7 as officer compensation; the rest of the profit passes to you on Schedule K-1.
- You owe tax on your share of the profit whether or not you take it out.
- It is due March 15 for a calendar year. Late returns cost $260 per owner per month for 2026 returns, up to 12 months.
What Form 1120-S is
Form 1120-S reports the income, gains, losses, deductions, credits and other information of a corporation, or an LLC, for a year it is covered by an S election. It is the second tax return the election adds: your own Form 1040 continues, and the business files this one too.
Because an S corporation passes its profit to its owners, it usually pays no federal income tax itself. The return still has to be filed, on time, every year.
Your salary and the profit
The salary the corporation paid you goes on line 7, compensation of officers. Once total receipts reach $500,000 or more, the corporation also completes Form 1125-E, which lists officer compensation in detail.
What is left after your salary and the other expenses is the S corporation’s income. It passes to you on Schedule K-1, and you report it on your own return. You may owe tax on your share of the corporation’s income whether or not it was distributed to you.
Schedule K-1 and your basis
Each owner gets a Schedule K-1 showing their share of the income, deductions and credits. You also need your stock and debt basis in the corporation, which you generally figure on Form 7203. A distribution larger than your basis is taxed as a capital gain, so the basis matters every year you take distributions.
When it’s due
Form 1120-S is due by the 15th day of the 3rd month after the tax year ends: March 15 for a calendar year. For 2026, that is March 15, 2027. Form 7004 gives an automatic extension if it is filed by the regular due date.
The late-filing penalty is a fixed amount per owner for each month or part of a month the return is late, up to 12 months: $255 for returns filed in 2026 and $260 for returns due in 2027. For one owner, a 2026 return filed a full year late can cost up to $3,120, even when no tax is due.
Who prepares it
If a preparer files Form 1120-S for you, the calculator counts the extra preparation cost as a typical value you can change. What is an S corp? explains where that cost fits, and the setup checklist shows Form 1120-S in the first-year calendar.
Sources
- Instructions for Form 1120-S (2025)
- Shareholder’s Instructions for Schedule K-1 (Form 1120-S) (2025)
- Instructions for Form 1120-S (2025), When To File
- Rev. Proc. 2025-32, sec. 4.56
- 26 U.S.C. 6699(b), (e)(1)
- Instructions for Form 7203 (Rev. December 2022)
- IRS, S corporations (page last reviewed 11-Jun-2026)
- Form 1040 (2025)
Every figure was read on an official page and checked a second time. Checked October 24, 2026. How we check facts.
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