What Is OMB No. 1545-0119 for Form 1120?

OMB No. 1545-0123 is the control number assigned by the Office of Management and Budget (OMB) to Form 1120, the U.S. Corporation Income Tax Return. This number is a procedural identifier on the tax form C corporations use to report their financial activities to the IRS.

Form 1120 is the primary document for C corporations to report their financial performance over a tax year. Through this form, a corporation details its income, gains, losses, deductions, and credits to calculate its final tax liability. This provides a structured way for the IRS to assess the tax obligations of corporations.

Determining Filing Requirements for Form 1120

All domestic C corporations are required to file Form 1120 with the IRS each year. This filing obligation exists regardless of whether the corporation generated taxable income or was dormant for the year. The requirement is tied to the entity’s legal status as a corporation, making the annual filing a standard compliance activity.

Certain business structures do not use Form 1120. For instance, S corporations file Form 1120-S, and partnerships file Form 1065. A Limited Liability Company (LLC) is normally taxed as a partnership or a disregarded entity, but it can elect to be taxed as a C corporation. If an LLC makes this election by filing Form 8832, it will then be required to file Form 1120 annually.

Required Information and Documentation for Form 1120

Before filling out Form 1120, a corporation must gather its official corporate name, mailing address, and Employer Identification Number (EIN). The date of incorporation and the total value of assets at the end of the tax year are also required.

The income section of Form 1120 requires a detailed accounting of all revenue streams, starting with gross receipts or sales. A significant component of this calculation is the Cost of Goods Sold (COGS), detailed on Schedule A. To complete Schedule A, a business needs its beginning inventory, the cost of purchases, and its ending inventory for the tax year.

Corporations can claim deductions for ordinary and necessary business expenses to reduce their taxable income. Common deductions reported on Form 1120 include:

• Compensation of officers
• Salaries and wages paid to employees
• Costs for repairs and maintenance
• Rent expenses
• Taxes and licenses
• Interest paid on business debt
• Depreciation

Depreciation expenses are calculated and detailed on Form 4562, Depreciation and Amortization, which is then attached to the Form 1120 filing.

The form includes several schedules that provide a more in-depth look at the corporation’s financial position. Schedule L is the balance sheet, and it requires the corporation to report its assets, liabilities, and equity based on its books. The figures must be provided for both the beginning and the end of the tax year.

Schedule M-1 performs a reconciliation between the net income reported on the company’s internal financial statements (book income) and the taxable income on the tax return. This is necessary because some items are treated differently for accounting and tax purposes. For example, federal income tax expense is recorded on the books but is not deductible for tax purposes.

Schedule M-2 analyzes the changes in a corporation’s unappropriated retained earnings throughout the year. This schedule starts with the balance of retained earnings at the beginning of the year and accounts for adjustments. Key figures needed include the net income per books, cash distributions paid to shareholders, and other items that increased or decreased retained earnings.

The Form 1120 Filing Process

The deadline for filing Form 1120 is generally the 15th day of the fourth month following the end of the corporation’s tax year. For corporations that operate on a standard calendar year, this means the due date is April 15th. If the due date falls on a weekend or a legal holiday, the filing deadline is moved to the next business day.

If a corporation needs more time, it can obtain an automatic six-month extension by filing Form 7004 on or before the original due date. This extension only provides additional time to file the return, not to pay any tax that is due. A corporation must estimate its tax liability and pay the amount owed by the original deadline to avoid potential penalties and interest.

Corporations have two options for submitting Form 1120: paper filing or electronic filing. For those who mail a paper return, the correct mailing address depends on the corporation’s state and total assets, as listed in the form instructions. Alternatively, corporations can e-file using approved tax preparation software.

Any tax liability must be paid in full by the original due date of the return. The most common method for businesses to make tax payments is through the Electronic Federal Tax Payment System (EFTPS). This is a service from the U.S. Department of the Treasury that allows businesses to make federal tax payments online or by phone.