S corporation tax return preparation (Form 1120-S and Massachusetts Form 355S)

What we prepare

An S corporation generally does not pay federal income tax itself. Its income, deductions and credits pass through to the shareholders, and the return exists to report them. The Massachusetts return does the same for state purposes, and also carries the corporate excise every S corporation owes, including the $456 minimum.

Preparation of annual business tax returns is part of our business tax service, and the owner's personal return is usually prepared alongside it, since the K-1 figures feed straight into it.

• Federal Form 1120-S, with a Schedule K-1 for each shareholder
• Massachusetts Form 355S, with Schedule S and an SK-1 for each shareholder
• Form 63-ELT, if you and we decide the business should make a Massachusetts pass-through entity excise election for the year
• The shareholders' Form 1040 and Massachusetts Form 1, when those are in scope as well

Due dates and extensions

A federal extension is requested on Form 7004, filed before the regular due date. Massachusetts grants an automatic 6-month extension for Form 355S if the payment requirements are met, and the Massachusetts return must be filed electronically. An extension gives more time to file, not more time to pay what is owed.

The Massachusetts pieces people miss

Massachusetts treats a federal S corporation as an S corporation for state purposes, so no separate state election is needed. It does, however, impose its own corporate excise. Every S corporation owes at least the $456 minimum. Larger ones owe an income-measure excise at 2.00% when total receipts are $6 million to under $9 million and 3.00% at $9 million or more.

Estimated excise payments are required if the excise is reasonably expected to exceed $1,000. From tax year 2026, a pass-through entity excise election under Chapter 63D, the new Chapter 63E, or both, is made on Form 63-ELT with the return. It is irrevocable for the year and binds all members, so we discuss it well before the return is due, not while signing.

What to send us

The return is built from the books, so the most useful thing is a year that is already closed: reconciled bank and card accounts and a balance sheet that ties out. Beyond that:

• Year-end profit and loss and balance sheet, with bank and credit card statements
• Payroll reports for the year, including the owner's W-2 and the quarterly federal and Massachusetts filings
• A list of distributions to each shareholder, separate from wages and loans
• Records of any shareholder loans to or from the company
• Fixed-asset purchases and sales, with invoices and dates placed in service
• Health insurance premiums paid for more-than-2% shareholders
• Prior-year Form 1120-S and Form 355S, and any IRS or Massachusetts notices received
• Any change in ownership during the year

The business tax preparation records checklist has the full list. If the books are not current, catching them up is the first piece of work, and it is scoped separately.

How the work runs

1. 1.You send the year-end records; we check that the books reconcile and ask about anything that does not tie out
2. 2.We review owner wages, distributions and shareholder loans, since these drive the K-1s and basis
3. 3.We prepare Form 1120-S and Form 355S, plus Form 63-ELT if an election has been agreed
4. 4.You review and sign; the returns are filed electronically
5. 5.K-1 and SK-1 figures carry into the shareholders' personal returns

Where we come in

We give you a scope and a price in writing before anything starts. If you are between returns and want to talk about the coming year first, bring the last two years of returns and your current books; the page on what to bring to an accounting consultation lists the rest.