What Are the Different 1120 Tax Forms?

The Form 1120 series is a collection of tax returns U.S. corporations use to report their financial activities to the Internal Revenue Service (IRS). These documents allow corporate entities to detail their income, gains, losses, deductions, and credits to calculate their income tax liability. All domestic corporations, including Limited Liability Companies (LLCs) that elect to be taxed as corporations, must file a version of this form annually. The series includes several variations tailored to specific types of corporate structures.

Identifying the Correct Corporate Tax Form

Selecting the appropriate form from the 1120 series is determined by the corporation’s legal structure and tax status. The most common version is Form 1120, the U.S. Corporation Income Tax Return, which is the standard for domestic C corporations. A C corporation is a legal entity taxed separately from its owners, and LLCs that have filed Form 8832 to be treated as a corporation also use Form 1120.

Form 1120 is different from Form 1120-S, the U.S. Income Tax Return for an S Corporation. An S corporation is a tax classification, achieved by filing Form 2553, that allows profits and losses to be passed directly to the owners’ personal income without being taxed at the corporate level. Form 1120-S is an informational return that reports the allocation of income and deductions to each shareholder, who then reports these items on their individual tax returns.

The series also includes specialized forms, such as Form 1120-H for Homeowners Associations. This form is for entities like condominium management, residential real estate, and timeshare associations. To use this form, an organization must derive at least 60% of its gross income from membership dues and assessments from residential unit owners. Filing this form allows an association to be taxed on its non-exempt income, like interest, at a flat rate of 30%, or 32% for timeshare associations.

Other variations address unique corporate structures. Form 1120-C is filed by cooperative associations, such as farmers’ co-ops. Life insurance companies report their tax information using Form 1120-L, while foreign corporations with U.S. income file Form 1120-F. These specialized forms ensure the particular tax rules applicable to these entities are properly applied.

Information and Records Needed to Prepare the Return

Before preparing a corporate tax return, a business must gather its core financial statements. A complete income statement, also known as a profit and loss (P&L) statement, is necessary to report figures like gross receipts and sales. A year-end balance sheet is also required, providing a snapshot of the company’s assets, liabilities, and shareholder equity.

Detailed records substantiating all claimed expenses and deductions are also important. This documentation includes receipts, invoices, bank statements, and payroll records for deductible expenses like employee salaries, rent, taxes, interest, and advertising costs. Information regarding the company’s assets is needed to calculate the depreciation deduction. A fixed asset schedule should list all business assets, their purchase dates, and their costs to complete Form 4562, Depreciation and Amortization.

The return also requires details about the corporation’s leadership and ownership. A list of all corporate officers and their compensation is mandatory; for corporations with gross receipts of $500,000 or more, this is detailed on Form 1125-E, Compensation of Officers. For S corporations, a list of shareholders, their ownership percentages, and stock basis information is needed to allocate income and losses on Schedule K-1.

Several schedules are parts of Form 1120 and require specific information. Schedule L is the balance sheet, presenting the company’s financial position at the beginning and end of the tax year. Schedule M-1 reconciles the net income from the company’s books with the taxable income on the return. Schedule M-2 analyzes changes in the corporation’s unappropriated retained earnings.

Key Sections of the U.S. Corporation Income Tax Return

The main Form 1120 guides a corporation from its total revenue down to its final tax liability through three sections: Income, Deductions, and Tax and Payments.

The Income section begins with the corporation’s gross receipts or sales. After subtracting returns, allowances, and the Cost of Goods Sold (calculated on Form 1125-A), the result is the corporation’s gross profit. Other income types, such as dividends, interest, rent, and royalties, are added to arrive at the total income.

Following the income calculation, the Deductions section itemizes business expenses for the tax year. This part includes lines for deductions like officer compensation, salaries and wages, repairs, rent, taxes, and interest paid. The depreciation deduction from Form 4562 is also entered here. These deductions are summed and then subtracted from total income to yield taxable income before special deductions.

The final calculation occurs in the Tax and Payments section. The corporate tax rate, a flat 21% for C corporations, is applied to the taxable income to figure the total tax. Any available tax credits are subtracted from this amount. Finally, estimated tax payments made during the year are applied to determine the final tax due or the overpayment to be refunded.

Filing Procedures and Deadlines

Once the return is complete, specific procedures must be followed. The filing deadline for C corporations (Form 1120) is the 15th day of the fourth month after the company’s tax year ends, which is April 15 for calendar-year businesses. For S corporations (Form 1120-S), the deadline is the 15th day of the third month after the tax year ends, or March 15 for calendar-year filers.

If a corporation cannot meet its deadline, it can request an automatic six-month extension by filing Form 7004. This form must be submitted by the original due date of the return. This is an extension of time to file, not to pay; the corporation must estimate and pay any tax it expects to owe by the original deadline to avoid penalties and interest.

Corporations have options for submitting their return. The IRS requires corporations that file 10 or more returns of any type during the year to file their tax return electronically using an authorized IRS e-file provider. For corporations not required to e-file, paper filing is an option, and the mailing address is in the form’s instructions.

For e-filed returns, the IRS sends an acceptance or rejection notice. If a return is rejected, the notice will include an error code explaining the reason, allowing the corporation to correct the issue and resubmit. If there is a tax balance due, payment can be made electronically through the Electronic Federal Tax Payment System (EFTPS) or by mail with a payment voucher.