We do not prepare S-Corporation returns (Form 1120-S). However, we can assist with preparing your personal return using the K-1 that reports your pass-through income from the S-Corp.
Here's an overview of what we'll cover—click any section to jump ahead.
- What Qualifies as an S-Corporation?
- Do I Need to File an S-Corporation Return (Form 1120-S)?
- How S-Corporation Income Is Reported on Your Personal Return
- S-Corp K-1 Income Usually Can’t Be Excluded Under the FEIE
What Qualifies as an S-Corporation?
To qualify for S corporation status, the corporation must meet the following requirements:
- Be a domestic corporation
- Have only allowable shareholders
- Can be individuals, certain trusts, estates, and
- May not be partnerships, corporations, or non-resident alien shareholders
- Have no more than 100 shareholders
- Have only one class of stock
- Not be an ineligible corporation (i.e., certain financial institutions, insurance companies, and domestic international sales corporations)
Do I Need to File an S-Corporation Return (Form 1120-S)?
Yes. All S-Corporations must file Form 1120-S annually at the business level.
Important to know:
- Form 1120-S is filed by the S-Corporation
- Shareholders receive Schedule K-1 from that filing
- MyExpatTaxes does not prepare Form 1120-S
- We can help prepare your personal tax return using the K-1 you receive after completing 1120-S
How S-Corporation Income Is Reported on Your Personal Return
S-Corporation profits pass through to shareholders and are reported on Schedule K-1.
This income is:
- Reported on your individual tax return
- Taxable whether or not you take distributions
- Separate from any W-2 wages you receive from the S-Corp
S-Corp K-1 Income Usually Can’t Be Excluded Under the FEIE
You usually can’t use the Foreign Earned Income Exclusion to exclude S-Corporation pass-through income reported on Schedule K-1.
The Foreign Earned Income Exclusion (FEIE) generally applies only to earned income, such as W-2 wages.
This is a common misconception among S-Corp owners living abroad. Only wages paid through payroll may be eligible for the FEIE—not S-Corp profits reported on Schedule K-1.
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