1040 - US Individual Income Tax Return
If you are an individual, whether you are married or single, you will need to file an annual 1040 tax return by April 15th. Taxpayers file as one of the following filing statuses.
Single
Married filing jointly
Married filing separately
Head of household
Qualifying surviving spouse
This return is used to calculate your taxable income and the tax on that income. It is divided into sections where you report your income and deductions to determine either the amount of tax you owe or the overpayment refund you are to receive. Depending on what type of income you are reporting, you may need to include additional forms known as schedules.
To file a 1040, an adjusted gross income, AGI, is calculated. Then, taxpayers can claim eligible deductions such as:
Mortgage interest
State and local income tax or sales tax
Charitable contributions
Medical expenses
Once your taxable income has been determined, the withholdings and tax already paid will be subtracted from the tax owed. This will leave you with the amount of taxes either due to pay to the IRS or to be expected as a refund.
1120S - US Income Tax Return for an S Corporation
If you have an S Corporation, you will annually file form 1120S. This return is meant for smaller companies with fewer than 100 shareholders.
S Corps avoids double taxation at both a corporate and personal level. These corporations are pass-through entities, which means they don’t pay corporate taxes. Instead, the income is taxed at the owners personal income tax rate.
Form 1120S reports profits, losses, credits and deductions for the fiscal year. This determines any income or loss, tax payments or refunds that are due to shareholders on their personal returns. This information is provided to the shareholders on schedule K1. The 1120S must be filed before your personal return and is due by March 15 each year.
1065 - US Return of Partnership Income
Form 1065 is the tax return for partnerships to report income, gains, deductions and credits. A partnership does not pay tax on its income, but it passes through any profits or losses to its partners. A schedule K1 must also be submitted for each partner when filing form 1065.
The biggest difference between a partnership and an S Corporation is that the partnership’s earnings are subject to self-employment taxes on the owner’s individual returns.