Various items spread out on a table with a note saying tax time.

What is Form 1120?

Form 1120 is an IRS form that C corporations use to report their income, gains, losses, deductions, and credits, as well as calculate their income tax liability. Since C corporations are separate entities from their owner or owners, taxes are paid at the corporate income tax rate instead of the personal tax rate. Depending on how much revenue your corporation generated for the year, this rate could be anywhere between 15% to 35%.

Continue reading as we'll discuss how to fill out each page of Form 1120, when it's due, and how we can help with the process.

How to Fill Out Form 1120

Here's a helpful guide on what you'll need to fill out on each page of Form 1120:

Page 1

  • Basic information about your corporation. This includes name, address, Employer Identification Number, date of incorporation, and total assets.
  • Gross income consists of gross receipts, costs of goods sold, dividends, interest, rents, royalties, capital gains, and other sources of income. You add all of this up to get your gross income.
  • Tax-deductible expenses. Lines 12 to 26 show all available deductions, including officers' compensation, salaries, wages, repairs and maintenance, charitable contributions, advertising, etc. On-Line 26, you can account for other expenses such as meals and entertainment, utilities, insurance premiums, etc. Check the Form 1120 instructions for more details about deductions.
  • Tax, refundable credits, and payments. This is the last section of page 1, where you calculate whether you receive a refund or owe money to the IRS. Refer to Schedule J on Form 1120 to get the information you need.

    • Page 2

  • Schedule A – Cost of Goods Sold: If your corporation is service-oriented, then this section is not applicable to you. Otherwise, if your business is taking the deduction for the cost of goods sold on page 1, you must account for these amounts in this section.
  • Schedule C – Dividends and Special Deductions

    • Page 3 & 4

  • Schedule J – Tax Computation and Payment
  • Schedule K – Other Information: This includes your company’s accounting method, business type, NAICS classification number, ownership of stock, and information about your shareholders.

    • Page 5

  • Schedule L – Balance Sheet per Books: You do not have to complete this section if your corporation’s total income and year-end assets are under $250,000.
  • Schedule M-1 – Reconciliation of Income (Loss) per Books with Income per Return.
  • Schedule M-2 – Analysis of Unappropriated Retained Earnings per Books.

    • If keeping track of all this information seems overwhelming, it’s best to utilize professional bookkeeping and tax preparation services like ours to ensure your form is completed thoroughly and accurately.

    When is Form 1120 Due?

    When you operate a C-Corporation, you are given the option to choose when to start and end your tax year, but usually, it’s at the beginning and end of a quarter. For the 2022 federal tax year, Form 1120 is due on the 15th day of the fourth month after the end of your corporation’s tax year. For example, if your corporation’s tax year ends on December 31, 2022, you must file and pay your corporate income taxes by April 18, 2023. The due date must always occur on a business day.

    Work With Experts Who Know Corporate Taxes

    IRS Form 1120 is an essential document for C corporations to report income, losses, deductions, and credits while determining their tax liabilities. The process to complete this form can be a bit tricky, with there being various schedules and aspects to consider. This form is crucial in fulfilling your corporate tax obligations accurately, we recommend seeking professional help. At 1800Accountant, our business tax experts stand ready to guide you through the process, ensuring your Form 1120 is filed correctly and submitted on time. This gives you time back to focus more on your business's growth and less on tax complexities.

    This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.