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IRS Form 1120

This form and its relevant successors specifying particular business-related taxation issues have been renewed and amended quite frequently in recent years. Finally, the Internal Revenue Service has issued the ultimate version of the form and the continued compilation instructions. The 1120 Form itself is used for reporting corporate income taxes to the IRS.

The US-based and registered corporations do not pay income taxes based on the same interest rate as individuals. That is why separate legal forms exist to facilitate the procedure of income tax calculation for small and medium enterprises and corporations. Plus, there are C-type and S-type corporations, and the tax-related regulations, requirements, and restrictions vary for them as well. So, in order to file your income taxes and tax returns properly, you need to get acquainted with the taxation system and the currently effective legislation. We are here to help you with that difficult task.

Below, you will find guidelines and recommendations drafted by our specialists to make the filing process a bit easier for you. Follow our detailed instructions to avoid any major drawbacks or mistakes in the form cause the indicated information will directly affect the tax history of your enterprise.

Who Can File the Form?

Typically, all US domestic business entities and corporations are obliged to use the 1120 Form to determine and report their taxable income. The companies, and business entities in general, are liable for reporting all their profits, losses, tax deductions, and existing credit responsibilities even if there is no income in the current accounting period.

Amongst the domestic business entities and corporations, only the C-type corporations use the 1120 Form (as all S-type corporations are filing the 1120-S IRS Form to report their returns).

By US law, certain organizations, depending on their activity priorities, may be exempt from tax withholding. Amongst such organizations are the following ones:

  • Organizations that are involved in charity;
  • Social welfare organizations and clubs;
  • Trade associations;
  • Labor organizations;
  • Veterans’ organizations;
  • Political organizations.

Another important taxation detail to mention is that the form does not imply or approve of the trickle-down principle, meaning that the board members do not have anything to do with the corporation’s income taxes. There are, however, many different “pass-through” business types that allow the trickle-down and withhold certain amounts of income taxes and apply deductions from their owners and shareholders; they, in turn, report those as their respective income taxes.

Primary Purpose

The main purpose of the document, as stated above, is to help the respective employers file their tax returns on time. But we may also be more specific and formulated the form’s objectives as follows:

  • To report corporate income tax returns to the IRS;
  • To let other business entities (like LLCs) report their taxes if they have elected to be taxed as corporations;
  • To keep respective corporate balance records and calculations;
  • For audit purposes.

Other IRS Forms for Corporations

Requirements of the Internal Revenue Service for different types of businesses vary. Find out more IRS forms devised specifically for corporations.


How to Fill Out the 1120 Form

You can get the form template from the official IRS website: they do provide interactive forms now. The 1120 Form can be filed electronically; we encourage you to use our latest software tools and developments to create, customize, and fill out the form online. You may then submit it to the address indicated in the form not later than the 15th day of the 3rd month after your corporation’s taxation accounting year is over. But ensure that you check the renewed location data.

You can always use legal or tax adviser assistance to help you manage your income taxes and tax returns. But in the meantime, you can also use our detailed guidelines and recommendations below to fill out the form without professional help.

We would also advise you to read the continued instructions that the IRS has issued with the new version of the form to get familiar with the novelties, terms, and definitions. It is a 30-page document containing exhaustive info on all the form’s contents.

  • Insert the Company’s Name

At the very top of the Form, insert the company’s legal and registered name.

step 1 insert the company’s name - filling out an irs form 1120

  • Provide the Company’s Legal Address

In the next section, you shall put the company’s address, including street, building, room or suite number, city/town, state, and ZIP code.

step 2 provide the company’s legal address - filling out an irs form 1120

  • Checkbox the Type of Tax Return

In the top left corner of the form, there is a list of suggested options for the tax return types. Choose the one you are willing to submit and tick the corresponding box.

step 3 checkbox the type of tax return - filling out an irs form 1120

  • Enter the EIN and Assets Description

In this section, you need to enter the Employer’s Identification Number, the company’s incorporation date, and describe the total amount of the assets pertaining to the subject company.

step 4 enter the ein and assets description - filling out an irs form 1120

  • Insert the Total Income Calculations

Below, you will find a list of entries that will constitute your company’s total income amount that had occurred during the financial period under review. You will need all the corporate income details you can get and provide legal proof of their source and existence. These include interest rate income from dividends, investments, rent, royalties, and other capital-related profits. Only the company’s responsible financial officer gets to fill out and calculate the gross income amount that goes in the section.

step 5 insert the total income calculations - filling out an irs form 1120

  • Provide Total Deduction Specifications

In this section, the financial officer must calculate the total amount of the company’s deductions that may include: salaries, compensations, interests, taxes, sick leave (as of 2021), and other expenses that might be relevant.

step 6 provide total deduction specifications - filling out an irs form 1120

  • Enter the Taxable Income Amount

Based on all the information designated in the previous sections, the financial officer calculates the total taxable amount in US dollars, as well as the amount owed and the amount currently overpaid (if applicable).

step 7 enter the taxable income amount - filling out an irs form 1120

  • Put Date, Signature, and Title

Once finished, the responsible officer shall put a signature, current date, and their respective title.

The preparer also defines if the IRS can contact them to discuss the matters concerning the information designated in the form. The preparer shall tick their answer in the box right next to the title.

step 8 put date, signature, and title - filling out an irs form 1120

  • Insert the Preacher’s Data

The company’s responsible financial officer proceeds to fill out their personal data. The officer needs to enter the name, physical address, and contact number of the firm that the officer works for.

step 9 insert the preacher's data - filling out an irs form 1120

  • Fill in the Schedules and Supplements

In the conclusion of the form, there are several supplements (Schedules) that one must also fill out and submit to the IRS office. Some schedules are required for submission, and some are kept for the company’s financial records. You will find a list of all supplements with a brief explanation below:

  • The Cost of goods sold supplement;
  • Schedule C

This one is dedicated to the dividend income and the so-called special deductions. Mind that this particular Schedule C differs from that of individual proprietors.

step 10.1 fill in the schedules and supplements - filling out an irs form 1120

  • Compensation amounts paid by the company to its officers;
  • Schedule J

This supplement is a more detailed paper providing info on tax computation, including credits and other relevant taxes paid by the company;

step 10.2 fill in the schedules and supplements - filling out an irs form 1120

  • Schedule K

With this one, you can provide other essential info about your accounting methods, business type, stock ownership, and submit your NAICS classification number.

step 10.3 fill in the schedules and supplements - filling out an irs form 1120

  • Schedule L

This one is a balance sheet that the responsible financial officer fills out based on the books at the beginning and the end of the current financial year.

step 10.4 fill in the schedules and supplements - filling out an irs form 1120

  • Schedule M-1

Once you have filled the previous sections out and calculated all the necessary amounts, you may proceed to fill out this Schedule to record reconciliation of income gains or losses per book with the designated income per return.

step 10.5 fill in the schedules and supplements - filling out an irs form 1120

  • Schedule M-2

Finally, you can now provide a comprehensive analysis of all unappropriated retained earnings per the current financial yearbooks.

step 10.6 fill in the schedules and supplements - filling out an irs form 1120