Form 1120S is the tax return used by S corporations to report income, deductions, gains, losses, and other financial information to the Internal Revenue Service (IRS). This form is crucial because it allows S corporations to pass income directly to shareholders, avoiding double taxation that typically applies to C corporations. By filing Form 1120S, an S corporation can inform the IRS of its financial status while providing a mechanism for its shareholders to report their share of the income on their personal tax returns.
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