Schedule K-1 (Form 1120S) reports a shareholder’s allocable share of income, deductions, credits, and other items from an S corporation. This schedule is part of Form 1120-S (US Income Tax Return for an S Corporation). Each S corporation shareholder should receive their own Schedule K-1.
Purpose of Schedule K-1:
An S corporation is a flow-through entity for federal tax purposes, which means the S corporation shareholders are ultimately responsible for reporting their allocable share of income and paying income taxes.
What are the Components of Schedule K-1?
Part I – Information About the S Corporation:
- S corporation name, address, and employer identification number (EIN)
- The IRS center where the S corporation filed its tax return
- The S corporation’s total number of shares outstanding at the beginning and end of the tax year
Part II – Information About the Shareholder
- Shareholder name, address, and taxpayer identification number (TIN)
- Shareholder’s allocation percentage
- The number of shares owned by the shareholder at the beginning and end of the tax year
- The amount of loans from the shareholder to the S corporation at the beginning and end of the tax year. If the shareholder has no loans to the S corporation, the amounts reported are zero
Part III – Shareholder’s Share of Current Year Income, Deductions, Credits, and Other Items:
The S corporation reports its gross income, deductions, credits, and other items on its annual Form 1120-S. The amounts are allocated amongst the S corporation shareholders and reported in Part III, Lines 1 through 17.
Video Tutorials for Form 1120-S and Schedule K-1
Please view our videos below for information related to Schedule K-1:
- Video Walkthrough of the Schedule K-1 (Form 1120S)
- Form 1120-S Tutorial for Landscaping Company in 2023
- Form 1120-S Tutorial for Rental Real Estate Company in 2023
Additional Information
Taxpayers can find more information in the Form 1120-S instructions.