Form 1120
The U.S. Corporation Income Tax Return. A C corporation pays its own tax, and shareholders pay again on dividends. Getting both layers right takes planning.
Illustration of Form 1120's layout: page 1, Schedule L and Schedule M-1. Not the actual IRS form.
21%
flat federal corporate income tax rate
Apr 15
due date for calendar-year corporations
2×
layers of tax: corporate profits, then dividends
$10M
in assets brings the more detailed Schedule M-3
Who needs to file
Domestic corporations file Form 1120 whether or not they had income or owe tax, unless they've elected S corporation status.
Any corporation organized in the U.S. that hasn't elected to be taxed as an S corporation.
LLCs that elected corporate treatment and didn't go on to elect S status.
An S election that's revoked or terminated turns the company back into a C corporation.
Companies raising outside capital or planning around the qualified small business stock exclusion.
Related corporations may be able to file one consolidated return, which brings its own rules.
Why it's complicated
Taxable income starts from your financial statements, then gets adjusted line by line. Those adjustments are where the decisions live.
Schedule M-1 or M-3 reconciles book income to taxable income: meals, penalties, accruals, depreciation and more.
Bonus depreciation, Section 179 and regular schedules each change when deductions land.
Losses carry forward, but generally offset only 80% of taxable income in a later year.
Salary is deductible to the company. Dividends aren't. The mix you choose changes the total tax bill.
Keeping profits in the company beyond its reasonable needs can trigger an extra tax.
Corporations pay estimated tax during the year, and large corporations face stricter rules.
Penalties
Corporations face the same stacking penalties as individuals, plus their own rules for estimated tax.
5%
of unpaid tax for each month a return is late, up to 25%.
0.5%
of unpaid tax for each month it goes unpaid, up to 25%.
20%
accuracy-related penalty on a substantial understatement of tax.
Plus
an underpayment penalty when quarterly estimates fall short.
We can catch the company up and look at penalty relief options such as first-time abatement or reasonable cause.
Where CPA judgment helps
I prepare your 1120 with the decisions that matter to owners in mind.
The timing of income and deductions, set up to work for you year after year.
Deciding what to write off now and what to spread over time.
Balancing what you pay yourself to manage double taxation.
Spotting accumulated earnings tax exposure before it becomes a problem.
Form 1120 · From $1,499
Tell me about your company and I'll send a quote. Final pricing depends on the size and complexity of the return.
Become a clientOr email seanpark@sptaxcpa.com