Schedule K-1 is a form used by shareholders of an S corporation to report their share of the corporation's income, deductions, credits, and other items. It provides information on the shareholder's portion of the S corporation's taxable income or loss, as well as any other tax items that may be allocated to the shareholder. The information from the Schedule K-1 is then included on the shareholder's individual tax return (Form 1040) to calculate their personal tax liability.