If you are a shareholder within an S-corporation, the S-Corporation must file its own tax return on Form 1120-S U.S. Income Tax Return for an S Corporation, which is due on March 15th for calendar year filers.
An S-corporation is a pass-through entity, meaning it will pass all income to each shareholder to report on their individual income tax return. When the S-corporation return is prepared, it must produce a Schedule K-1 (Form 1120-S) Shareholder’s Share of Income, Deductions, Credits, etc. for each shareholder. This K-1 is reportable on the individual’s personal income tax return. Generally, an S-Corporation will only be taxed at the business level when they switch from being a C-Corporation to an S-Corporation; however, there are other situations in which an S-Corporation may be taxed (and it does not flow through to the shareholders).
To enter the Schedule K-1 data in the Business Income section of the TaxAct 1040 program:
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