IRS Form 1120 – What is it and How can You File 1120 Tax Form?

There may be a lot of confusion when taxpayers have so many documents to fill out and submit to the IRS, contractors, and companies. When the end of the tax year approaches, most of small companies say that one of their top worries is filing taxes. Although filing taxes is a difficult procedure, it is possible to understand every step of it.

Understanding the concept of IRS Form 1120 is critical for US firms in order to accurately file income tax returns with the Internal Revenue Service (IRS). Now check this page to know What is a 1120 Tax Form?, Who Files Tax Form 1120?, When Should a 1120 Tax Form Be Filed?, How to fill out Form 1120

What is a IRS 1120 Tax Form?

The corporate income tax return is Tax Form 1120, or IRS Form 1120 in its most basic version. It offers a thorough summary of the commercial income and financial operations of a corporation for the tax year. This form is used to record earnings, gains, losses, and any applicable credits or deductions on a U.S. corporation income tax return. The purpose of all this data is to ascertain a business’s tax burden.

This form needs to be completed and submitted to the IRS by C companies and LLCs. The only exception is if, during a given tax year, the corporation chooses to file as a different kind of business. Even in cases where a domestic business has no revenue, the IRS mandates that it utilize Form 1120 to calculate its income tax due. This form requires the firm to record all of its income, gains, losses, deductions, and credits. Subchapter S corporations do not utilize Form 1120. Form 1120-S is the business tax return that this type of business submits.

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Who Files Tax Form 1120?

It is necessary for small enterprises that conduct business in the United States as corporations to file IRS Tax Form 1120. An extensive summary of a corporation’s income, credits, and deductions for the year is given on this form. This form may also need to be filed by S companies and some LLCs in addition to regular corporations. Penalties and audits, which may be expensive for small firms, are only possible for timely and proper filings.

IRS Form 1120 - What is it and How can You File 1120 Tax Form?

When Should a 1120 Tax Form Be Filed?

Corporation-structured U.S. enterprises are required to submit IRS Form 1120 annually. The 15th day of the third month after the conclusion of your corporation’s tax year, usually on March 15th, is the deadline for submitting this form. It is crucial to stay on top of deadlines and make sure that paperwork is submitted on time in order to prevent fines and other expenses. You can ask for an extension of up to six months if you need extra time to file. For more accurate tax returns and speedier processing, electronic filing is a great choice.

What taxes do C Corps pay?

C corporations pay their own taxes on their revenue since they are taxed differently from their owners. Because the shareholders of a C Corporation also pay taxes on their portion of the corporation’s profits when they are delivered as dividends, this is referred to as double taxation.

C Corporations may be liable for state and local income taxes in addition to federal income tax. States impose these taxes at different rates. C corporations are permitted to deduct a number of costs from their taxable revenue, including rent, salary, and cost of products sold. Additionally, they are eligible to get some tax credits, such the research and development tax credit. Here is how C Corps are taxed in 2023: 

Taxable IncomeTax Rate
USD 0 – USD 50,00015%
USD 50,001 – USD 75,00025%
USD 75,001 – USD 100,00034%
USD 100,001 – USD 335,00039%
USD 335,001 – USD 10,000,00041.5%
Over USD 10,000,00026%

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How to fill out IRS Form 1120

  • Every year, Form 1120-S can be online filed. Small company owners can use specialized tax software to self-complete these forms. While most of these programs do have a price tag, they might not be as pricey as hiring an expert.
  • Certain S businesses, particularly those with more intricate tax arrangements, could decide to hire a professional, such an accountant or tax preparer, to finish their yearly tax filings. Error risk is decreased (or eliminated) when these forms are filled up and submitted by a tax expert

Final Words

In summary, company owners are required to file IRS Form 1120, a complicated tax form, each year. It is possible to complete Form 1120 correctly in order to avoid fines and interest charges. Maintaining your business’s good standing with the IRS and staying on top of your taxes may be achieved by familiarizing yourself with the fundamentals of Form 1120 and its filing requirements. 


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