Running a business requires filing taxes annually, a necessary task for all business owners. As you probably know, learning about the various tax forms required and their due dates can be challenging, not to mention stressful. If your business is set up as a regular corporation, you must file IRS Form 1120 with your tax return.
IRS Form 1120, also known as the U.S. Corporation Income Tax Return, is the primary form for reporting corporate income and losses. If you want information about IRS Form 1120, including what it is and how to file it, read this Huddle Business Capital blog article. It features a helpful guide to IRS Form 1120.
As mentioned earlier in this blog article, IRS Form 1120 is a form used by all domestic businesses set up as corporations to report income, losses, deductions, credits, and related information. The form comprises five pages and requires detailed financial information about a business for the calendar year.
Like other IRS forms, Form 1120 requires basic business information, such as the company name, address, employer identification number (EIN), date of incorporation, and legal structure.
All domestic corporations in the United States (including those going through bankruptcy proceedings) are required to file an income tax return, regardless of whether they had taxable income in the calendar year. The only exception is for corporations operating as charitable organizations. These are usually exempt under section 501(c)(3).
If your business is a C corporation, you will be required to use Form 1120. If your business is set up as an S corporation, you will need to use Form 1120-S. Next, you must file Form 1120 if your business is set up as a limited liability company (LLC). Speaking of LLCs, here's another scenario to become aware of. If your company is an LLC and you elect to file as a C corporation, you must file Form 1120.
Form 1120 and Form 1120-S have different filing due dates. Form 1120 is due on the 15th day of the fourth month after the corporation's tax year ends. Form 1120-S is due on the 15th day of the third month after the corporation's tax year ends. If the due date falls on a Saturday, Sunday, or a legal holiday, the business can file the form on the next business day.
If the corporation was dissolved during the tax year, the due date for filing Form 1120 is the 15th day of the fourth month after the date it dissolved. Finally, if you need more time to complete your business's tax return, you must complete and submit IRS Form 7004. This form requests a six-month extension to file your income tax return.
No matter what type of corporation your business is, you will need to make estimated tax payments if your estimated tax will reach $500 or more. The estimated tax payment installments are due on the 15th day of the fourth, sixth, ninth, and twelfth months of the taxable year.
Please note that a corporation is required to use electronic funds transfer to make a federal tax deposit. An easy way to do this is through the IRS' Electronic Federal Tax Payment System (EFTPS).
When completing Form 1120 for your corporation, avoiding common mistakes is crucial to ensure compliance and maximize your tax benefits. Two of the most frequent errors are incorrect/missing financial figures and calculation mistakes, which can lead to inaccurate tax assessments. When entering information on Form 1120 and your tax return, double-check all your figures more than once to ensure accuracy.
Next, incomplete information is a red flag for the IRS and can delay processing or trigger an audit. Ensure that every section of Form 1120 is filled out completely. Provide all required schedules and accounting documents for your corporation's tax form. Before submitting your form, take time to review it and look for errors or omissions. Ensure you steer clear of the final common error: submitting a tax return after the deadline.
Please note that the information and due dates for IRS Form 1120 are subject to change, so always consult an accountant or tax professional to ensure the accuracy of your tax return.
Huddle Business Capital is not affiliated with nor endorses the Internal Revenue Service (IRS). This Huddle Business Capital blog article is purely educational and contains general information and opinions; it is not intended to provide advice or recommendations of any kind.