1120 Tax Form Explained [What It Is and How to File It]
January 06, 2023
Corporations in America must use the 1120 tax form to report their gains and losses, among other things. Even though filing taxes can seem difficult at first, don’t worry—we’ve got you covered!
This article will break down the 1120 tax form, tell you who it’s for, and explain how you can file it easily. So, read on and get the answers you need!
What is the 1120 Tax Form?
The 1120 tax form is a form that corporations must use to find out how much they’re due in business tax or what their tax liability is. It’s an Internal Revenue Service (IRS) document that allows companies to report their gains, losses, credits, deductions, and, most importantly, income.
Because of its purposes, many people like to call the 1120 tax form “U.S. Corporation Income Tax Return.”
Still, there are different types of 1120 forms for different types of organizations. Check out the table below for details:
1120 Tax Form Type
Who It Is For
Cooperative associations (e.g., farmers’ cooperatives)
Residential real estate management, condominium management, timeshare association, etc.
Life insurance companies
Who Needs to File Tax Form 1120?
Essentially, if you own a domestic corporation, even if you don’t have any taxable income, you are obligated by law to file tax Form 1120. The only exception are the organizations that are exempt from this rule under Section 501 and don’t need to fill it out.
Other entities that are required to file the 1120 tax form include:
- Farming corporations. These corporations must file an 1120 tax form because it allows them to report their losses or income.
- Limited liability companies (LLCs). LLC owners who have chosen to be taxed as corporations need to file both Forms 1120 and 1065 if they operate in partnership.
- Foreign-owned domestic disregarded entities. If a foreign corporation owns a domestic disregarded entity (DE), it is required to file this form along with Form 5472.
- Corporations with FASIT interest ownership. FASIT—short for “financial asset securitization investment trust”—is a tool used for securitizing non-mortgage debt with short maturities (e.g., car loans).
- Businesses that are taxed as corporations. On top of having to file an 1120 tax form, businesses taxed as corporations must also file Form 8832.
What Organizations Are Exempt from Paying Taxes?
If you meet the criteria from the list above and your corporation is located in the U.S., filing Form 1120 will be required for you. However, the IRS also considers certain organizations tax-exempt, including:
- Social welfare organizations
- Trade associations
- Charitable organizations
- Social clubs
- Labor organizations
- Political organizations
- Veterans’ organizations
If you’re wondering which other organizations are tax-exempt, you can check out the list the IRS has made.
What Information Does Tax Form 1120 Include?
Now that you know what the 1120 tax form is and who needs to file it, you’re probably wondering what information goes into it.Typically, the form includes the following details:
- Employer Identification Number (EIN)
- Capital gains
- Gross receipts
- Total income and assets
- Date you incorporated
- Cost of goods sold (COGS)
- Dividends, interests, and royalties earned
- Tax deductions
- Business tax credits (if any)
Keep in mind that you must be extra careful not to make any mistakes when filing Tax Form 1120. If there’s an error in your form, you must amend it by completing the special Form 1120-X, or “Amended U.S. Corporation Tax Return,” within three years from the original return date.
On top of that, you must also attach the appropriate schedule, form, or statement if the correction you make includes deductions, credits, or income.
When Do You File 1120 Tax Form?
As a general rule, you must file the 1120 tax form by the 15th day of the fourth month after your tax year ends. If your corporation’s fiscal year ends on June 30, you must file by the 15th day of the third month of your tax year.
Note that the due dates that fall on Saturdays, Sundays, or any holidays are typically extended to the next business day.
How Do You File 1120 Tax Form?
To file an 1120 tax form, you must first download the document from the official IRS website. Once you do it, you need to enter the required details—either electronically or on paper—and then either send the form in PDF format to the IRS or mail them a physical copy. Generally, the digital method is recommended more often, as it’s much more convenient.
Still, in case you choose to mail the IRS your Tax Form 1120, you should remember to use approved private delivery services. This way, the IRS will receive your form with written proof of the mailing date. For a more detailed set of instructions, you can always check out the guide the IRS has prepared.
- The 1120 tax form is an Internal Revenue Service (IRS) document used by corporations to report their income, losses, gains, credits, and deductions.
- The form is used by farming corporations, LLC companies, corporations with FASIT interest ownerships, and many others.
- If your corporation is exempt under Section 501, you don’t need to file Tax Form 1120.
- The deadline for filing the 1120 tax form is the 15th day of the fourth month after your tax year ends.
- You can file your 1120 tax form either electronically or via mail by using approved private delivery services.
And that’s a wrap!
Hopefully, this article has helped you get a better grasp of the 1120 tax form and made your tax filings a tad bit easier!
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