Preparing a S Corporate return in ProSeries

If you use ProSeries Basic, you have an automatic FastPath license for ProSeries Professional. To complete business returns, install ProSeries Professional for your business return. You'll be charged pay-per-return pricing when printing or e-filing the return.

Down below we'll briefly go over the general flow of completing a S Corporate (Form 1120S) return in ProSeries, as well as some potential next steps.

1. Create the client in ProSeries. To do so, from the HomeBase view, if not selected already, select Form 1120S: S Corps from the dropdown menu.
2. Create a new tax return for the client. To do so, go to File ⮕ New client. When prompted, select 20XX US Form 1120S: Income Tax Return for S Corp and click OK.
3. Starting on the S Corporation Information Worksheet, complete all applicable parts. This will inform the main form of the 1120S return.
4. To add shareholders, press F6 and type "k1w" and select OK. This will open the Schedule K-1 Worksheet. Complete this worksheet for each shareholder.
   • For more info on this, see here.
5. Now that you’ve set up their S Corporate return, to begin reporting for the main form, info and amounts may be entered as follows.
   • If there was a change in ownership, press F6 and type "ow" and select OK. This will open the Weighted Average Ownership Percentage Worksheet.
     • For more info on this, see here.
   • From the Forms bar on the left, under Common Forms, select Form 1120S p1-2 to open Form 1120S p1-2: Income Tax Return for an S Corporation. Inputs for reporting income (lines 1a-6) and deductions (lines 7-22), as well as relating to tax and payments (lines 23-28) can be found on Page 1.
   • For some general information about S Corporate returns in ProSeries, see here.
6. As for Schedule B, scroll down to Page 2 of Form 1120S p1-2: Income Tax Return for an S Corporation. An important consideration being:
   • If you need to suppress Schedules L, M-1, and M-2.
     • For more info on this, see here.
7. As for Schedule K, from the Forms bar on the left, under Common Forms, select Form 1120S p3-5 to open Form 1120S p3-5: Income Tax Return for an S Corporation and complete Page 3 as needed.
   • Amounts from the Schedule K will flow to the partner's Schedule K-1 based on their stock ownership % from their respective Schedule K-1 Worksheet.
   • If you have other deductions or income (loss) that you to report at the Schedule K-1 level, see here for more info.
8. As for Schedules L, M-1, and M-2, you'll want to complete Schedules M-1 and M-2 first, and then scroll back up to the Schedule L to balance your balance sheet. That said, you may need to do the following, depending on the situation:
   • If you need to manually enter items on Schedule M-1, from the Forms bar, under Main Forms, select to Sch M-1 Wks to open the Schedule M-1 Items Worksheet. Entries here flow to Schedule M-1 on Page 5.
   • If you need to report an analysis of accumulated adjustment account, scroll down Page 6 of Form 1120S p3-5: Income Tax Return for an S Corporation until you get to Schedule M-2.
     • Review the checkboxes along the top of Schedule M-2. Ensure you have them checked correctly
     • If you need to manually compute net income (loss), use the Schedule M-2 Smart Worksheet at the top of Schedule M-2.
     • If applicable, complete Other increases, line 4 and Other decreases, line 7.
   • To balance your Schedule L, scroll down to Page 4 of Form 1120S p3-5: Income Tax Return for an S Corporation.
     • For more info on this, see here.
9. Depending on the situation, additional forms and schedules may need to be completed. Down below are a couple common scenarios:
   • If you need to generate Shareholder basis statements, go to the K-1 Information section of your S Corporation Information Worksheet.
     • For more info on this, see here.
   • If you need to generate Schedules K-2 and K-3, press F6 and type "k-2, p1-3" to bring up and select K-2, Schedule K-2, Shareholders' Pro Rata Share, Parts I-III. Select OK.
     • For more info on this, including info on who must file, see here.
   • Add state-specific inputs.
10. Once you’ve completed the return and validated all required information is entered with the required forms and schedules generating, you can either e-file the return, or print it for the purpose of review or paper-filing.