In an S corporation, profits, losses, deductions, and credits flow through to shareholders. Each shareholder receives a Schedule K-1 (Form 1120S) that reports their share of these items. This form is used to report S-corp income and related items on your individual tax return. Use this guide to enter your S Corporation K-1 into TurboTax Online accurately.

📝 What You’ll Need:

- Your Schedule K-1 (Form 1120S)
- Any attachments or footnotes
- Optional: Schedule K-3, if the S corporation has foreign income or deductions

💻 Step-by-Step in TurboTax

Step 1: Go to the Right Place

Open your TurboTax return
Go to: Federal tab → Wages & Income
Scroll to: S-corps, Partnerships, and Trusts
Click “Start” or “Revisit” next to Schedule K-1
Select S Corporation (Form 1120S) when asked
💡 Pro Tip – Real User FAQ:
“What if I don’t see Schedule K-1 in TurboTax?”
Make sure you’ve selected TurboTax Premier or higher. K-1 entry isn’t available in the Free or Deluxe versions.

Step 2: Enter General Info About the S Corporation

TurboTax will ask for:
- Corporation name & EIN
- Your ownership % (from Box F)
- Whether you materially participated in the business
💡 Jargon Buster:
Material participation means you were involved in running the business (like a working owner). If you were, TurboTax treats your income as nonpassive, which can affect how losses and deductions are handled.
💡 Pro Tip – Real User FAQ:
“Why does it matter if I was passive or not?”
Because passive income is limited — you may not be able to deduct all your losses unless you materially participated.

Step 3: Enter the K-1 Box by Box

TurboTax will guide you through each box — here’s what they mean and how to handle them:

Box

What It Means

Do This in TurboTax

Box 1

Ordinary Business Income

Enter as-is. This is your share of S corp profit.

Box 2

Rental Real Estate Income

Enter separately — TurboTax can’t split income types.

Box 12

Deductions passed through (Section 179, charitable contributions, depreciation, etc.)

Enter under ‘Other Deductions.’ Match code (A–W) to TurboTax prompts, using attachments for details.

Box 14

Self-Employment Earnings

Usually blank — S corp shareholders are not self-employed.

Box 16

Foreign Transactions

Check ‘yes’ if any amount is reported here.

Box 17

Alternative Minimum Tax

Enter values carefully; TurboTax handles calculations.

Box 18

Tax-Exempt Income

Used for basis tracking — not taxable.

Box 19

Distributions

Not taxable unless exceeding basis. Still must be entered.

Box 20

Other info (e.g., QBI, At-risk, PAL)

Codes like V (QBI), AH (At-risk), AI (Passive loss). Enter codes per footnotes; TurboTax will prompt for details.

Step 4: K-3 / Foreign Tax Info (If Applicable)

If your K-1 has Box 16 entries or you received a Schedule K-3, TurboTax will ask: “Did this K-1 include foreign transactions?”
👉 Say Yes and enter country, income type, and foreign taxes paid.
💡 Pro Tip – Real User FAQ:
“Do I need a K-3 if none was provided?”
Contact the S corp if Box 16 is filled but no K-3 received.

Step 5: Final Review & Forms Check

TurboTax completes:
- Schedule E (income)
- Form 8995/8995-A (QBI)
- Form 1116 (foreign tax credit)
- Form 7203 (shareholder basis)
💡 Pro Tip – Real User FAQ:
“What’s Form 7203?”
Tracks your stock/loan basis. Needed if you have losses, distributions, loans, or contributed basis.

Flow of K-1 Entries to Your Form 1040

Box

Description

TurboTax Entry

Flows to 1040/Schedules

Box 1

Ordinary Business Income

Schedule K-1 Income screen

Schedule E Part II, Line 28 → 1040, Line 5

Box 2

Rental Real Estate Income

Rental Income (Schedule E) screen

Schedule E Part I, Line 21 → 1040, Line 5

Box 4

Interest Income

Interest Income screen

Schedule B Part I, Line 1 → 1040, Line 2b

Box 5a

Ordinary Dividends

Dividends screen

Schedule B Part II, Line 5 → 1040, Line 3b

Box 6

Royalties

Royalties screen

Schedule E Part I, Line 4 → 1040, Line 5

Box 7

Net Short-Term Capital Gain

Capital Gains screen

Schedule D → 1040, Line 7

Box 8a

Net Long-Term Capital Gain

Capital Gains screen

Schedule D → 1040, Line 7

Box 9

Unrecaptured 1250 Gain

Capital Gains screen

Schedule D Part I, Line 11 → 1040, Line 7

Box 10

Section 1231 Gain

Other Income screen

Form 4797 or Schedule D → 1040, Line 7

Box 12

Section 179 Deduction

Other Deductions screen

Form 4562 basis tracking → not on 1040

Box 13

Other Deductions

Other Deductions screen

Schedule E → 1040, Line 5

Box 16

Foreign Transactions

Foreign Tax Credit screen

Form 1116 → 1040, Line 13

Box 17

AMT Items

AMT Items screen

Form 6251 → 1040, Line 11b

Box 18

Tax-Exempt Income

Tax-Exempt Interest screen

1040, Line 2a

Box 19

Distributions

Distributions screen

Not on 1040 (basis tracking only)

Box 20

Other Info (e.g., QBI)

Section 199A screen

Form 8995/8995-A → 1040, Line 10