# Form 1120-S: S-Corporation Annual Return

Country: United States
When: 15 March (calendar year): 15th day of 3rd month after year-end. For 2026 the due date was Monday 16 March because 15 March fell on a Sunday. For the 2026 tax year the due date is Monday 15 March 2027. Form 7004 must be filed by the regular due date and extends the time to file by six months.

Annual federal income tax return for US S-corporations. Due 15 March for calendar-year filers. 6-month automatic extension via Form 7004 to 15 September. The shareholder's basis, not the amount of cash distributed, decides whether a loss or distribution is allowed. Keep a basis schedule each year.

## Who this applies to

- All US S-corporations (entities that elected S status via Form 2553)
- LLCs taxed as S-corps after Form 2553 election
- Corporations that meet the S election requirements, which include no more than 100 shareholders and only one class of stock

## What to file

Form 1120-S with K-1s for each shareholder, P&L, balance sheet, M-1 reconciliation, basis tracking schedules.

## How to file

Electronically via authorized e-filers. Send each shareholder their K-1 by 15 March (so they can file personal returns by 15 April).

## Payment due

S-corp doesn't pay federal income tax (pass-through). Shareholders pay tax on their K-1 portion via personal Form 1040. The S corporation itself can owe tax in limited cases, such as built-in gains tax and passive income tax, and it must pay any state entity-level tax that applies. Estimated tax rules for corporations apply to those items.

## What happens if you miss it

Late filing penalty: $255 per shareholder per month for returns due after 31 December 2025, for up to 12 months. Late or incorrect K-1s carry the information return penalty for each statement, which for 2026 is $60 within 30 days, $130 up to 1 August and $340 after that, with $680 for intentional disregard.

## Submission checklist

- Confirm reasonable compensation paid to shareholder-employees as W-2 wages
- Reconcile book to tax (Schedule M-1)
- Update shareholder basis schedules
- Generate K-1 for each shareholder
- Distribute K-1s by 15 March
- File Form 1120-S electronically

## Documents you need

- Shareholder list with ownership percentages and dates of any change in ownership
- Payroll reports and Forms W-2 showing reasonable compensation for shareholder-employees
- Loan documents and distribution records for basis tracking
- Prior-year Form 1120-S and Schedules K-1

## Common mistakes to avoid

- Under-paying owner W-2 wages (the #1 IRS S-corp audit issue)
- Forgetting state S-corp tax (some states tax S-corps directly)
- Missing the K-1 distribution deadline (information return penalties apply to each K-1)
- Not tracking basis: affects future distributions and loss deductions

Source: https://www.irs.gov/forms-pubs/about-form-1120-s