Did you skip right over partnerships and set up your company as a C corporation? You went through all the proper legal channels to create it, and now it’s time to ensure you fulfill the tax side of things, too.
C corporations are required to file Form 1120, U.S. Corporation Income Tax Return, with the IRS. It’s a completely different tax form from the one individuals fill out, but don’t worry. We’ll go through a high-level overview of the form and what you need to know so you can keep your business compliant with the tax authorities.
The corporate tax return is complicated. Gordon Law has helped many C-corps file Form 1120 and can assist your business with its filing obligations, too.
What is Form 1120?
Form 1120 is simply a tax return for corporations. Businesses use the form to report:
- Income
- Expenses
- Deductions
- Credits
- Assets
- Liabilities
- Shareholder’s Equity
The form calculates the tax liability for the corporation and reports general information about the business and its activities to the IRS. The form requires the corporation to complete financial statements, including an income statement and a balance sheet.
Who is Required to File Form 1120?
Generally, all U.S. corporations must file Form 1120. It doesn’t matter if it’s your corporation’s first year in operation or last or if the company didn’t have any taxable income during the year. The corporation is still required to file Form 1120.
When is the Form 1120 Filing Due?
The Form 1120 filing is due by the 15th day of the 4th month after the end of the tax year.
Translation: If your corporation operates on a calendar year basis (which is most likely the case), then Form 1120 is due April 15th since this is the fourth month following the end of December. It can get tricky if your corporation uses a fiscal year, so you need to make sure you are aware of the deadline.
What Happens if I Can’t File Form 1120 by the Due Date?
Maybe you are too busy running your business or can’t get all the information you need to file your return on time. If, for any reason, you are not able to file Form 1120 by your corporation’s due date, you need to file an extension with the IRS so you have more time to complete it.
The extension is Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns. Filing the form BEFORE your corporation’s due date gives you an additional 6 months to file.
If you don’t file an extension and file Form 1120 late, the IRS will charge late filing penalties and interest for each month the return is late.
Even if you do file an extension, late payment penalties can apply. Be sure to pay the corporate balance due to the IRS by the original due date of Form 1120, or they will charge your corporation a tax payment penalty and interest for each month the tax remains unpaid.
Don’t cost your business unnecessary penalties. Keep on top of the corporate due dates or reach out to a professional like Gordon Law to help.
How to Complete Form 1120
The IRS posts Form 1120 instructions on its website for each tax year. You can use these instructions as a guide for completing the Form 1120 filing.
You will need to compile financial statements and detailed information regarding your corporation’s activity during the tax year to fill out Form 1120.
Some basic information you will need includes:
- EIN (employer identification number)
- Date of incorporation
- Total assets
- Shareholder information
- Income statement
- Balance sheet
Keep in mind, though, that this tax form is generally considered more complicated than the individual tax return, and it may benefit your business by having a tax professional assist in the preparation and filing.
Where to File Form 1120
Most Form 1120s are filed electronically. If you need to print and mail the form, the Form 1120 instructions list where to send the form based on the location of your corporation’s principal business, office, or agency and the corporation’s total assets for the tax year.
How We Can Help
Form 1120 is very different than the individual tax return. If this is your first year filing, or it was too complicated for you to do on your own last year, it may be time to seek professional corporate tax filing services.
Gordon Law has helped other corporations file their Form 1120 and avoid paying costly penalties to the IRS. Contact us today to see how we can help!
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