Form 1120

Detailed explanation of Form 1120 based on official information from IRS・各州税務局. Accounting Processes

Published: January 12, 2026

Form 1120: U.S. Corporation Income Tax Return

1. Overview

Form 1120, the U.S. Corporation Income Tax Return, is the primary tax document used by domestic C corporations to report their income, gains, losses, deductions, credits, and to calculate their federal income tax liability for the tax year. It is a fundamental compliance requirement established by the Internal Revenue Service (IRS) under the Internal Revenue Code. The timely and accurate filing of Form 1120 is critical for corporations to fulfill their legal tax obligations, avoid penalties, and maintain good standing with the federal tax authority. The form serves as the official record of a corporation's financial activity for tax purposes and is the basis for determining the corporate income tax owed to the U.S. government.

2. Applicable Objects & Scenarios

Form 1120 must be filed by every domestic corporation, including entities electing to be treated as corporations for tax purposes, unless it is specifically exempt under section 501 of the Internal Revenue Code (e.g., certain non-profit organizations). This includes:

  • Standard C Corporations: The most common filers.
  • Personal Service Corporations (PSCs): Certain corporations providing services in fields like health, law, engineering, etc.
  • Entities Electing Corporate Status: LLCs or other entities that have filed Form 8832 to be classified as a corporation for tax purposes.

The form is required annually. The filing deadline is generally the 15th day of the fourth month following the end of the corporation's tax year (April 15 for calendar-year corporations). Corporations can request an automatic 6-month extension of time to file by submitting Form 7004 by the original due date, but this extension does not grant an extension to pay any tax due.

3. Core Conclusions

  • Mandatory Filing: All domestic C corporations must file Form 1120 annually, regardless of whether they have taxable income or any activity.
  • Tax on Net Income: Corporate tax is calculated on the corporation's taxable income (gross income minus allowable deductions).
  • Double Taxation Potential: C corporations face potential double taxation: the corporation itself pays tax on its profits, and shareholders pay tax again on dividends distributed from after-tax profits.
  • Estimated Tax Payments: Corporations are generally required to make estimated tax payments throughout the year to avoid underpayment penalties.
  • Comprehensive Reporting: The form requires detailed reporting of income, business expenses, asset information, credits, and shareholder details.

4. Procedures & Steps

Step 1: Preparation

Gather all necessary financial records for the tax year, including:

  • Financial statements (income statement, balance sheet).
  • Records of all gross receipts and sales.
  • Documentation for all business deductions (cost of goods sold, salaries, rent, interest, depreciation, etc.).
  • Information on assets and depreciation (may require Form 4562).
  • Details of tax credits being claimed.
  • Information on officers' compensation and shareholder details, including ownership percentages.
  • Prior year's tax return for reference.
  • Records of estimated tax payments made during the year.

Step 2: Application & Submission

Complete Form 1120 and all required supporting schedules. Key sections include:

  • Income: Reporting gross receipts, returns, and other income.
  • Deductions: Itemizing allowable business expenses.
  • Tax Computation: Calculating taxable income and applying the current corporate tax rate. (Please verify with official sources for current rates and brackets).
  • Payments: Reporting estimated tax payments and any credits applied.
  • Schedules: Attaching necessary schedules such as:
    • Schedule L: Balance Sheets per Books.
    • Schedule M-1: Reconciliation of Income (Loss) per Books With Income per Return.
    • Schedule M-2: Analysis of Unappropriated Retained Earnings per Books.
  • Signatures: The return must be signed by a corporate officer (e.g., President, Vice President, Treasurer, or Principal Accounting Officer).

The completed return can be filed:

  • Electronically: Through an authorized IRS e-file provider.
  • By Mail: To the IRS address specified in the form instructions for your corporation's location.

Step 3: Review & Confirmation

  • Review: Double-check all figures, mathematical accuracy, and attached schedules. Ensure all required information is provided and the form is signed.
  • Payment: If a tax balance is due, arrange for payment by the filing deadline using an acceptable IRS payment method (Electronic Federal Tax Payment System - EFTPS, credit/debit card, check, etc.). The extension to file is not an extension to pay.
  • Confirmation: If filing electronically, you will receive an electronic acknowledgment. If filing by mail, use certified mail for proof of delivery. The IRS will process the return and may send a notice if there are any issues or questions.

5. Frequently Asked Questions (FAQ)

Q1: Does an inactive corporation with no income need to file Form 1120? A1: Yes. A domestic C corporation is generally required to file Form 1120 every year, even if it has no income or activity, until it is legally dissolved. You may need to file a final return when closing the business.

Q2: What is the difference between Form 1120 and Form 1120-S? A2: Form 1120 is for C corporations, where the tax liability lies with the corporation itself. Form 1120-S is for S corporations, which are pass-through entities where income, losses, deductions, and credits flow through to shareholders' individual tax returns.

Q3: What happens if I miss the filing deadline? A3: Failure to file and pay on time results in penalties and interest. The failure-to-file penalty is typically more severe than the failure-to-pay penalty. Filing for an extension (Form 7004) avoids the failure-to-file penalty but not the penalty for late payment of tax owed.

Q4: Can I deduct dividends paid to shareholders on Form 1120? A4: No. Dividends paid to shareholders are not deductible business expenses for a C corporation. They are distributions of after-tax profits.

Q5: How are corporate tax rates applied? A5: Corporations are subject to a federal flat tax rate on their taxable income. (Please verify with official sources for the current corporate tax rate, as it is subject to change by legislation).

Q6: What is the "accumulated earnings tax"? A6: Corporations may be subject to an additional tax if they retain earnings beyond the reasonable needs of the business to avoid shareholder income tax on dividends. This is reported on Schedule PH if applicable.

Q7: Where can I get help filling out Form 1120? A7: You can consult the official Instructions for Form 1120 provided by the IRS, hire a qualified tax professional (CPA or Enrolled Agent), or use approved tax preparation software for businesses.

6. Risks & Compliance

  • Accuracy is Paramount: Errors, omissions, or misreporting can lead to IRS audits, penalties, interest charges, and potential legal consequences.
  • Underpayment of Estimated Tax: Corporations must generally pay estimated tax quarterly. Failure to do so can result in underpayment penalties.
  • Personal Liability for Trust Fund Taxes: Corporate officers can be held personally liable for willful failure to collect, account for, or pay over certain withheld taxes (e.g., employee income tax, Social Security, and Medicare taxes).
  • Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws and forms are complex and subject to change. You should consult the official IRS instructions, publications, and a qualified tax advisor for guidance specific to your corporation's situation.

7. References & Sources

8. Related Topics

  • Form 1120-S (S Corporation Income Tax Return)
  • Form 1065 (U.S. Return of Partnership Income)
  • Form 1040, Schedule C (Profit or Loss from Business - Sole Proprietorship)
  • Form 8832 (Entity Classification Election)
  • Form 2553 (Election by a Small Business Corporation - S Corp Election)
  • Corporate Estimated Tax Payments (Form 1120-W)
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