Filing your corporate taxes is a yearlong headache and a seasonal scramble. While the “One, Big, Beautiful Bill” provides some tax relief for startups and corporations, taxes have not disappeared. The rules have changed, making 2025 a great time to brush up (or begin) your understanding of the IRS Form 1120.
If you’re running a small business or corporation, navigating the Form 1120 is a yearly must. This guide gives a clear breakdown of what you need to know about the form and your filing obligations, whether you’re a startup founder or a tax advisor supporting multiple clients.
Table of Contents
- What is IRS Form 1120?
- Who needs to file Form 1120?
- 1120 vs. 1120-S: What’s the difference?
- What do you need to file?
- When is Form 1120 due?
- State and local filing obligations
- How to file: Options and best practices
- Avoiding penalties and staying compliant
- Get started with Harness
What is IRS Form 1120?
IRS Form 1120 is the U.S. Corporation Income Tax Return. It’s how C corporations (legal business entities taxed separately from their owners) report income, gains, losses, deductions, and credits, thus calculating what they owe the IRS.
The IRS 1120 form is central to corporate tax compliance. Domestic C corporations use Form 1120 annually to report their earnings and determine federal income tax liability.
💡 Not a C corp?
S corporations use a different version: Form 1120-S. Partnerships use Form 1065, and most LLCs file as sole proprietorships (Schedule C) or partnerships—unless they’ve elected corporate tax treatment.
Additional 1120 Form schedules
It’s important to note that filing Form 1120 doesn’t just handle business income. The form also covers a wide range of additional schedules, such as:
- Schedule D for capital gains and losses
- Schedule M-3 for reconciling book-to-tax differences
- Schedule G for ownership disclosure
- Schedule PH for personal holding company tax
Who needs to file Form 1120?
If your business is structured as a C corporation, and it generates income, then it must file Form 1120—even if your company owes no taxes.
Here’s a breakdown of typical filers:
- Startups that elect to be taxed as C-corps (often to attract venture capital).
- Multi-state operators: Established corporations conducting business across state lines.
- Foreign corporations earning U.S. income, including those with U.S. offices, employees, or significant business activity in the U.S., such as Unilever and Volkswagen.
- Personal service corporations like law firms or consultants set up as C-corps.
You’ll need an Employer Identification Number (EIN) to file and report income to the IRS. Corporations that don’t file on time (or at all) risk fines, interest, and even dissolution in their home state.
1120 vs. 1120-S: What’s the difference?
Here’s where business owners (and even some advisors) can get tripped up: not all corporations file the same tax form.
The form you file depends on whether you’re a C corporation or an S corporation:
| Corporation Type | Tax Form | Taxed At | Key Feature |
| C Corporation | 1120 | Corporate level | Subject to double taxation. Profits are taxed at the corporate level and again as dividends. |
| S Corporation | 1120-S | Shareholder level | Pass-through entity; profits flow through to shareholders and avoid corporate taxation. |
C-corps use Form 1120 to report taxable income and calculate the amount owed. S-corps, on the other hand, use Form 1120-S to report income, but they pass it through to shareholders, who each get a Schedule K-1 for personal tax reporting.
Other key differences
- Ownership rules: S-corps must have ≤100 shareholders, all U.S. citizens or residents.
- Filing deadlines: 1120 is due on the 15th day of the 4th month after your fiscal year ends (typically April 15). 1120-S is due one month earlier, on the 15th day of the 3rd month (typically March 15).
- Tax liability: C-corps pay taxes directly; S-corps usually do not (unless they owe certain specialty taxes like built-in gains).
Walmart, Inc. and Nike, Inc. are two well-known C corp examples. Both pay corporate taxes and distribute dividends for which shareholders are taxed.
Most S-corps are privately held, so their names are less recognizable unless they’ve publicly disclosed their entity structure. Local retailers and franchisees, such as independent Subway or H&R Block locations, are often S-corps structures as this set-up enables them to optimize tax treatment.
What do you need to file?
No matter if you’re filing 1120 or 1120-S, the IRS expects a full and accurate report. Here are the documents that you’ll typically need on hand:
- Business information: Official name, EIN, fiscal year, business activity code
- Income and expenses: Operating and non-operating revenue, cost of goods sold, deductions
- Balance sheet: Assets, liabilities, shareholder equity (especially if your gross receipts or assets exceed $250,000)
- Tax credits: Documentation to support any credits you’re claiming (i.e., WOTC Work Opportunity Tax Credit)
- Shareholder info (S-corps only): Names, addresses, ownership percentages for Schedule K-1s
Payroll documentation
If you’re a corporation with employees, don’t forget payroll tax responsibilities. You must withhold federal income tax and FICA contributions year-round and remit them on a regular schedule (often monthly or semiweekly) to the IRS and relevant state agencies.
Quarterly filings (Form 941) and year-end forms (W-2, Form 940) are also required. Failure to comply can lead to fines, interest, or even revocation of your right to do business in a state.
Failing to meet filing or payment requirements could result in fines, interest, or—in extreme cases—revocation of your right to do business in a state.
When is Form 1120 due?
For most C corporations, Form 1120 is due on the 15th day of the fourth month after the close of your fiscal year. If your company’s fiscal calendar aligns with the calendar year, that usually means April 15. If your fiscal year ends in June, your return is due September 15.
S corporations (filing Form 1120-S) follow a different deadline: the 15th day of the third month, usually March 15.
Can’t meet the deadline? File Form 7004 to request a 6-month extension. But remember—this extends the filing, not the payment due date. Late payment can still trigger penalties and interest.
State and local filing obligations
Federal compliance is just the beginning. Most corporations must also file state and sometimes local corporate tax returns.
Here’s what to expect
- State corporate income tax: Most states align with federal taxable income but apply their own rates and deductions.
- Franchise tax: Charged for the privilege of doing business in a state even if you don’t owe income tax.
- Annual report filing: Required by nearly all states, with steep penalties for missing deadlines (including administrative dissolution).
- Sales/use/property taxes: If your corporation owns property, sells products, or operates in multiple jurisdictions, you may have to remit additional taxes.
Some states (like South Dakota and Wyoming) have no corporate income tax, but others (like California or New York) have multiple business taxes to track. Multistate corporations must also consider nexus rules and apportionment formulas, which determine how much income is taxable in each state.
How to file: Options and best practices
Corporations can file Form 1120 by mail or electronically. However, if they file ten or more returns in a calendar year they are required to e‑file the Form 1120. Many corporations may file thousands of returns per calendar year when factoring one W-2 per employee, quarterly Form 941 payroll filings, annual FUTA (Federal Unemployment Tax Act) filings on Form 940, and 1099s for contractors.
Most businesses opt to:
- Use approved e-file software.
- Set calendar reminders for filing deadlines.
- Keep backup documentation for all credits and deductions.
- Work with a CPA or tax advisor–let the professionals follow tax laws, changing rules, and filing deadlines.
In general, e-filing is faster, generates proof of receipt, and reduces the risk of processing errors.
Avoiding penalties and staying compliant
Late filing? Missed a payment? The IRS doesn’t take it lightly.
Typical penalties include:
- 5% per month (up to 25%) for failing to file.
- 0.5% per month for late payments.
- Loss of good standing at the state level if you miss your franchise tax or annual report.
And these are just the financial penalties. Noncompliance can also delay funding, hurt valuations, and create legal headaches if your company is audited or acquired.
Get started with Harness
Understanding and filing Form 1120 is a vital obligation for startups and corporations. Compliance builds a healthy, scalable business—and avoids penalties.
Harness gives you access to vetted tax advisors, advanced practice management tools, and a secure platform to help you navigate complex tax issues and client communications with confidence. Get started with Harness today!
Disclaimer:
Tax related products and services provided through Harness Tax LLC. Harness Tax LLC is affiliated with Harness Wealth Advisers LLC, collectively referred to as “Harness Wealth”. Harness Wealth Advisers LLC is a paid promoter, internet registered investment adviser. Registration does not imply a certain level of skill or training. This article should not be considered tax or legal advice and is provided for informational purposes only. Please consult a tax and/or legal professional for advice specific to your individual circumstances. This article is a product of Harness Tax LLC.
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