Which IRS form do S corporations use to report income?

Which IRS form do S corporations use to report income?

• A. Form 1065
• B. Form 1120S
• C. Form 990
• D. Form 1040

Answer: (B)

S corporations use Form 1120S to report their income, deductions, and other tax information. This form is specifically designed for S corporations, which are pass-through entities. This means that the income, losses, deductions, and credits of the S corporation pass through to the shareholders, who report them on their individual tax returns. Form 1120S collects comprehensive information about the S corporation's financial activities, ensuring that it complies with IRS regulations while also providing the necessary details for each shareholder's tax obligations. Each shareholder then receives a Schedule K-1, which indicates their share of the corporation's income or loss. In contrast, the other forms listed work for different types of entities or tax situations. Form 1065 is used by partnerships, Form 990 is for tax-exempt organizations, and Form 1040 is the individual income tax return form. Each of these forms serves specific purposes for their respective entities, and thus, they are not applicable to S corporations. This specificity is why Form 1120S is the correct choice for S corporations reporting their income.

S corporations use Form 1120S to report their income, deductions, and other tax information. This form is specifically designed for S corporations, which are pass-through entities. This means that the income, losses, deductions, and credits of the S corporation pass through to the shareholders, who report them on their individual tax returns.

Form 1120S collects comprehensive information about the S corporation's financial activities, ensuring that it complies with IRS regulations while also providing the necessary details for each shareholder's tax obligations. Each shareholder then receives a Schedule K-1, which indicates their share of the corporation's income or loss.

In contrast, the other forms listed work for different types of entities or tax situations. Form 1065 is used by partnerships, Form 990 is for tax-exempt organizations, and Form 1040 is the individual income tax return form. Each of these forms serves specific purposes for their respective entities, and thus, they are not applicable to S corporations. This specificity is why Form 1120S is the correct choice for S corporations reporting their income.