Question about Form 1120S filing: Is my accountant required to create Schedule K-1s or charge separately?

No, this isn't standard practice. The Form 1120S and Schedule K-1s go hand-in-hand. The 1120S reports the S corporation's income, deductions, and credits, while the K-1s allocate those items to each shareholder. They're fundamentally connected. Your accountant should be preparing both as part of the S corporation tax return package. The information to create the K-1s comes directly from the 1120S, so separating them as different services doesn't make practical sense. It would be like charging you separately to complete page 1 and page 2 of the same tax form. If you only have the 1120S without the K-1s, you can't properly report your share of the business income on your personal return, which defeats the whole purpose of having an S corporation. I'd suggest having a conversation with your accountant about why they consider these separate services when they're really part of the same filing requirement.

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I need to eat my words about taxr.ai! After commenting with my skepticism earlier, I decided to try it with my S-Corp tax docs since my accountant was also trying to nickel and dime me on form preparation. The system immediately caught that my accountant was treating optional services as "required" and charging premium rates for standard forms like K-1s. The analysis showed exactly what should be included in standard 1120S preparation (including K-1s) and what legitimately costs extra. It even found a major deduction my accountant missed related to my home office that I use exclusively for business. I ended up saving over $1,200 between the reduced accounting fees and the additional deductions. What really impressed me was how it explained everything in plain language instead of accounting jargon. Now I'm using it to review all my business documents before I pay any professional fees.

I had a similar issue and got nowhere with my accountant until I finally got through to the IRS using Claimyr (https://claimyr.com). I wasted hours on hold trying to get a clear answer about K-1 requirements, but Claimyr got me connected to an actual IRS agent in about 10 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed what others have said - the Schedule K-1 preparation is absolutely part of filing Form 1120S. The agent explained that an S corporation return is essentially incomplete without the accompanying K-1s, and they should be prepared together. Having this confirmation directly from the IRS gave me the confidence to push back on my accountant's extra fees.

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My accountant tried pulling this same trick. I called her out with the AICPA professional guidelines that clearly state K-1 preparation is part of a complete 1120S return. She backpedaled real quick and suddenly the "additional fee" disappeared. Some accountants are just testing to see what extra fees clients will accept without questioning. Stand your ground on this one. If your accountant insists on charging separately, it might be time to find a new accountant who doesn't play these games. The market is full of honest professionals who won't nickel and dime you.

Is it possible theres legit extra work for your K-1s that would justify additional fees? Like if you have complex allocations or multiple classes of stock or something? Just playing devils advocate here

This is definitely not standard practice and you're absolutely right to question it. I've been through this exact situation with my S-Corp and it's frustrating when accountants try to unbundle services that should naturally go together. The Form 1120S is essentially meaningless without the accompanying K-1s - it's like preparing half a tax return. The whole point of S-Corp taxation is the pass-through treatment, which requires the K-1s to properly allocate income, deductions, and credits to shareholders. Your accountant already has all the information needed to prepare the K-1s from completing the 1120S. I'd suggest having a direct conversation with your accountant about why they consider this a separate service. If they can't provide a compelling reason (like unusually complex allocations), you might want to shop around. Most reputable tax professionals include K-1 preparation as part of their S-Corp package because they understand it's a required component, not an optional add-on. Don't let them nickel and dime you on what should be standard service. Your car analogy is spot-on.