Basics on the Form 1120 Corporate Income Tax Return
The IRS Form 1120 (US Corporation Income Tax Return) is the official form that corporations in the United States use to report their income, gains, losses, deductions, and credits to the Internal Revenue Service (IRS).
This form is used to calculate the amount of federal income tax a corporation owes. A corporation will often need to file a state corporate income tax return, depending on where the corporation operates.
Sample Form 1120 Tutorial for a Real Estate Rental Company
In this example video tutorial, a Form 1120 is prepared for the 2023 tax year for a U.S. corporation that holds a U.S. rental property investment.
The corporation is a Wyoming entity that purchased a rental property in Cheyenne, Wyoming. The direct owner of the Wyoming corporation is a Cayman Islands limited company (Ltd), which is ultimately owned by a non-U.S. citizen who is a resident of the UAE.
The rental property was rented for $7,000 per month starting on July 1, 2023.
In addition to the standard Form 1120 tax filing, the tax return must include the following additional schedules and disclosures:
- De minimus safe harbor election under Treas. Reg. Sec. 1.263(a)-1(f)
- Form 5472 to disclose the non-U.S. foreign shareholders
- Form 8810 (Corporate Passive Activity Loss and Credit Limitations) because the rental activity is a passive activity
- Schedule G disclosure of substantial shareholders
- Section 351 statement for corporate organization
What are the Basics of the Form 1120 Tax Filing?
Income & Expense Reporting. To report the corporation’s income, expenses, gains, losses, credits, estimated tax payments, and other transactions.
Tax Calculation. Corporations are generally subject to a 21% tax rate on its net taxable income. The tax rate is subject to change depending upon legislation passed by Congress.
A corporation’s net taxable income may differ from its net income per books. The corporation reports any book-to-tax adjustments on Schedule M-1 or Schedule M-3. For example, many corporations keep their internal accounting records using generally accepted accounting principles (GAAP), which often differ from U.S. federal tax rules.
Who Must File
C Corporations. Domestic corporations must file Form 1120 annually. Most domestic corporations are, by default, taxable as a C corporation. If a company forms a limited liability company (LLC) that elects to be taxed as a C corporation by filing Form 8832 (Entity Classification Election), the LLC must file Form 1120.
Due Date. Form 1120 must be filed annually and is due on or before the 15th day of the 4th month following the close of the corporation’s tax year. For a calendar year corporation, the due date is generally April 15. Extensions can be requested by filing Form 7004 (Application for Extension of Time to File).
Additional Schedules and Tutorials
- Form 1120-X Amended Corporate Tax Return
- Form 1120 for a Landscaping Company in 2022
- Form 1120 with Form 5472 for Foreign-Owned Corporation
- Form 1120 for the 2021 Tax Year
- Form 851 Affiliations Schedule
- Form 1120 Schedule L Balance Sheets
- Schedule B Form 1120 for Additional Information
- Schedule C Form 1120 for Dividends & Special Deductions
- Schedule G Form 1120 for Substantial Shareholders
- Schedule PH Form 1120 for Personal Holding Company
- Schedule N Form 1120 for Foreign Operations
YouTube Form 1120 Playlist
Please view our YouTube playlist here for a complete collection of Form 1120 related tutorials.
Additional Information
Corporations can find more information in the Form 1120 Instructions and IRS Publication 542 (Corporations).