As a business owner, you have so many responsibilities, yet so little time. You need to handle your business’s books, manage day-to-day business operations, and keep your business on track for success. In addition to your countless other tasks, you need to file a small business tax return.
If you’re a corporation (or file as a corporation), you need to file Form 1120 for your tax return. Read on to learn what is Form 1120 and whether your business needs to file one.
What is Form 1120?
Form 1120, U.S. Corporate Income Tax Return, is the form corporations must use to report income, gains, losses, deductions, and credits. Business owners also use Form 1120 to figure out their income tax liability. If your business is incorporated, you may need to use the form to file income taxes for the year.
After completing federal Form 1120, you will know how much your corporation needs to pay in taxes. In most cases, these taxes are paid as an estimated tax on a quarterly basis.
Corporations use Form 1120-W, Estimated Taxes for Corporations, to report any estimated taxes. If you are part of a corporation that has a tax liability of $500 or more for the tax year, file Form 1120-W in addition to Form 1120.
IRS Form 1120: Q&A session
Itching to learn more information about Form 1120? Check out our nifty question and answer session below to learn the ins and outs of Form 1120.
Who must file Form 1120?
As a brief recap, a corporation or C Corp is a type of business structure that is a separate legal entity from its owners. Corporation owners, or shareholders, are not personally liable for the business’s debts and actions.
If your business is a corporation or files as a corporation, you need to file Form 1120. This includes:
- C corporations or C Corps
- LLCs filing as corporations
If you incorporate your business, you must file the form annually.
But what about S corporations, you ask? Do S Corps need to file Form 1120? The answer: no. Although an S corporation has the word “corporation” in the title, S Corps don’t file Form 1120. Instead, S corporations must file Form 1120-S, U.S. Income Tax Return for an S Corporation.
What information is on Form 1120?
To fill out Form 1120, you will need to gather some information. Before you work on your form, be sure to have the following information handy:
- Your Employer Identification Number (EIN)
- Date you incorporated
- Total assets and income
- Gross receipts
- Cost of goods sold (COGS)
- Any dividends, interest, and royalties earned
- Capital gains
- Tax deductions
- Business tax credits, if applicable
Form 1120 tax form consists of six pages. The first page has four sections you must fill out:
- Basic corporation information
- Income
- Deductions
- Tax, refundable credits, and payments
The other five pages go over your dividends, special deductions, balance sheet, and other accounting information.
Before you file Form 1120, don’t forget to sign and date the bottom of the first page.
How do you file Form 1120?
You can either file Form 1120 electronically or by mail. If you decide to file the form via mail, you must fill out the form and mail it to the IRS.
If you choose to e-File your form, you can do so online through the IRS’s e-File service. Corporations reporting $10 million or more in assets must file Form 1120 electronically.
What is the deadline for the form?
The due date for Form 1120 is based on the corporation’s year-end date.
Corporation tax returns are typically due on the 15th day of the fourth month after the end of the company’s financial year. For example, a corporation with a year-end date of December 31 must file and pay taxes by April 15.
However, if your business’s fiscal year ends on June 30, you must file Form 1120 by the 15th day of the third month.
What should you do if you make a Form 1120 mistake?
If you make a mistake on Form 1120, you must file an amended tax return using Form 1120X, Amended U.S. Corporation Income Tax Return. You can use Form 1120X to correct the Form 1120 that you already filed.
You generally must file Form 1120X within three years of filing your original return.
To fill out Form 1120X, you need the following information:
- Business name
- Business address
- EIN
- Income and deductions
- Payments and credits
- Tax due or overpayment
- Explanation of changes
- Signature
If the correction includes income, deductions, or credit, attach the appropriate schedule, statement, or form to Form 1120X.
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This is not intended as legal advice; for more information, please click here.