Form 1120S K-1 is a tax document used by S corporations to report income, deductions, and credits to their shareholders. Each shareholder receives a K-1 that details their share of the corporation's income, which they must report on their personal tax returns. This form helps ensure that income is taxed at the individual level rather than at the corporate level. The K-1 includes important information such as the shareholder's percentage of ownership and the specific amounts of income, losses, and other tax items allocated to them. Shareholders use this information to accurately complete their Form 1040 and comply with tax regulations.