What is Form 1120?
Form 1120, U.S. Corporation Income Tax Return, is an Internal Revenue Service (IRS) form that permits U.S corporations to report their income, gains, deductions, losses, and credits. It also reports the corporations’ income tax liability.
Who must file Form 1120?
All domestic corporations must file an income tax return or Form 1120. Domestic corporations exempt under section 501 do not necessarily need to file an income tax form, unless imposed, or designated to file a special return. However, corporations in bankruptcy must also file a Form 1120.
The following business entities must file tax Form 1120:
- Limited Liability Companies (LLC). LLCs are only allowed to file Form 1120 if they have filed Form 8832 and elected to be an association taxable as a corporation. If an LLC is considered as partnership file Form 1065. Single-member LLC files their taxes through the owner's personal federal tax return.
- Farming corporations. Corporations that engage in farming shall file Form 1120 income or losses.
Note: Provide the income and deductions of the corporation according to the instructions for lines 1 through 10 and 12 through 29.
- Corporations with ownership interest in a Financial Asset Securitization Investment Trust (FASIT). If a corporation holds an ownership interest in FASIT, they must report all items of deductions, losses, income, gain, and credits of the corporation’s income tax return. A breakdown of all items must be included on an attached statement.
- Businesses elected to be taxed as corporations. These entities are obliged to file Form 8832, Entity Classification Elections, and attach a copy of Form 8832 to Form 1120 in accordance with the year of election.
- Foreign-owned domestic disregarded entities. If a foreign individual or corporation solely owns a domestic disregarded entity (DE), then a domestic DE is treated as excluded from its foreign owner. Meanwhile, a DE is not obliged to file a U.S income tax return, but may be required to file Form 1120 with an attached Form 5472 including the due date and extensions of the return.
- Qualified opportunity fund. Notwithstanding that the corporation has no income or expenses to report, they must file Form 1120 and attach Form 8996, in order to be certified as a Qualified Opportunity Fund (QOF).
- Qualified opportunity investment. The corporation must file its return with Form 8997 if the corporation has a qualified investment in a QOF during the calendar year.
When do I file Form 1120?
- Corporations must file their income tax return by the 15th day of the 4th month after the end of their tax year.
- A new corporation must also file its income tax return by the 15th day of the 4th month after the short period ends.
- Dissolved corporations must file by the 15th day of the 4th month after the date it has eradicated.
- Corporations with a fiscal tax year that ends on June 30 must file by the 15th day of the 3rd month after the end of its tax year.
- A corporation with a short tax year ending anytime in June and thus, will be treated as if the short year ended on June 30, must file by the 15th day of the 3rd month after the end of its tax year.
Note: The due date that falls on weekends and legal holidays should file on the next business days.
How to fill out Form 1120?
To complete your application, you may type or print this form.
Enter the date return for the calendar year 2019 and its fiscal years that begin in 2019 and end in 2020. For a fiscal or short tax year return, fill in the tax year space at the top of the form.
NAME AND ADDRESS
Enter the business’ legal name, address, and EIN that is registered from its legal documents and attachments on the designated blank fields.
A. IDENTIFYING INFORMATION
Check the purpose of filing your application and follow instructions for each in the following:
1a. Consolidated Return
For filing a consolidated return, you must attach Form 851, Affiliations Schedule, and other supporting statements to the return.
Include Form 1122, Authorization and Consent of Subsidiary Corporation To Be Included in a Consolidated Income Tax Return, to the parent's consolidated return for being recognized in a consolidated return as a first-year subsidiary corporation.
Note: Attach a separate Form 1122 for each new subsidiary being included in the consolidated return.
Use columns to show both before and after adjustments as follows:
- Items of gross income and deductions.
- A computation of taxable income.
- Balance sheets as of the beginning and end of the tax year.
- A reconciliation of income per book with income per return.
- A reconciliation of retained earnings.
Note: The information requested in 3, 4, and 5 are not necessarily needed if the corporation’s total receipts (line 1a plus lines 4 through 10 on page 1 of the return) and its total assets at the end of the tax year (Schedule L, line 15(d)) are less than $250,000.
1b. Life/Nonlife Consolidated Return
You can only check this life/nonlife consolidated return if a consolidated return is checked for the corporation which has a common parent of a consolidated group that contains a life insurance company.
2. Personal holding company
A personal holding company shall check item A, box 2, and have Schedule PH (Form 1120), U.S. Personal Holding Company (PHC) Tax attached.
3. Personal Service Corporation
A personal service corporation tests the performance of personal services. If this is the corporation you have, check item A, box 3.
Personal services performed in the fields of consulting, accounting, engineering, architecture, actuarial science, health, law and the performing arts.
Exemptions of personal service corporation for using calendar tax years:
- Opted to have a 52-53 weeks of tax year that will end to the calendar year or tax year elected under section 444;
- Capable of establishing a business purposes for a different tax year and acquires the endorsement of the IRS; or
- It chooses to have a tax year aside from a calendar year under section 444. Then, use Form 8716 to have the election of tax year other than a required tax year.
4. Schedule M-3 (Form 1120)
Here are the measures for filing Schedule M-3:
- A corporation with an overall asset of $10 million or more.
- Corporations that have less than $50 million total assets and required to file Schedule M-3 (Form 1120).
- If the corporation opts to complete Schedule M-1, line 1, must have the same amount on Schedule M-3, Part 1, line 11.
B. EMPLOYER IDENTIFICATION NUMBER (EIN)
Enter the registered EIN of the corporation. If there is no EIN yet, you can apply one at IRS.gov/EIN or mailing a Form SS-4.
C. DATE INCORPORATED
Enter the date when the business is incorporated.
D. TOTAL ASSETS
Provide the corporation’s total assets as this will be the basis of accounting for regularly keeping the corporation’s books and records at the end of the tax year.
Enter -0- if there are no assets yet at the end of tax year.
LINE 1A. GROSS RECEIPTS OR SALES
Enter the corporations’ total sales made.
LINE 1B. RETURNS AND ALLOWANCES
Enter cash and credit refunds the corporation made to customers for returned merchandise, rebates, and other allowances made on gross receipts or sales.
LINE 2. COST OF GOODS SOLD
Attach Form 1125-A, cost of each goods sold, if available. Enter on Form 1120, line 2, the amount from Form 1125-A, line 8.
LINE 3. GROSS PROFIT
Detract line 2 from line 1 to get the gross profit.
LINE 4. DIVIDENDS AND INCLUSIONS
You can skip this part and do it later. Check instructions for Schedule C, complete it and enter on line 4 the amount of from Schedule C, line 23.
LINE 5. INTEREST
Provide the taxable interest on U.S. obligations and on loans, notes, mortgages, bonds, bank deposits, corporate bonds, tax refunds, etc.
LINE 6. GROSS RENTS
Provide the gross amount obtained for the property rental.
Note: Take off the expenses such as repairs, interest, taxes, and depreciation on the proper lines for deductions.
LINE 7. GROSS ROYALTIES
Provide the gross royalties that the payments made for licensing a property.
LINE 8. CAPITAL GAIN NET INCOME
You can skip this part and do it later. Check instructions for Schedule D.
LINE 9. NET GAIN OR (LOSS) FROM FORM 4797, PART II, LINE 17
Attach Form 4797
LINE 10. OTHER INCOME
Enter any other taxable income that is not reporting from line 1 through line 9.
List the type and amount of income on an attached statement. If the corporation has only one item of other income, describe it in parentheses on line 10.
LINE 11. TOTAL INCOME
Sum up line 1 through line 10 to get the total net income.
LINE 12. COMPENSATION OF OFFICERS
Attach Form 1125-E
LINE 13. SALARIES AND WAGES
Provide the overall salaries and wages paid for the tax year. Do not include salaries and wages deductible elsewhere on the return.
Note: Please do not deduct as wages the amount allocated for depreciation and other expenses claimed on lines 20 and 26.
LINE 14. REPAIRS AND MAINTENANCE
Enter the cost of repairs and maintenance that is not claimed in the return.
LINE 15. BAD DEBTS
Enter the debts that have no use and are insignificant during the tax year.
LINE 16. RENTS
If there is a vehicle rented or leased, enter the annual rent expensed during tax year.
LINE 17. TAXES AND LICENSES
Provide all the taxes paid during tax year, except:
- Federal income taxes.
- Taxes not imposed on the corporation.
- Foreign or U.S. possession income taxes if a foreign tax credit is claimed.
- Taxes, including state or local sales taxes, that are paid or incurred in connection with an acquisition or disposition of property.
- Taxes deducted elsewhere on the return, such as those reflected in the cost of goods sold.
- Taxes assessed against local benefits that increase the value of the property assessed.
LINE 18. INTEREST
Enter the interest allocation that has been made. See Temporary Regulations section 1.163-8T for the interest allocation rules. Do not deduct the interest income from interest expense.
LINE 19. CHARITABLE CONTRIBUTIONS
Enter the contributions or donations paid within the tax year.
LINE 20. DEPRECIATION
Attach Form 4562. Then include the cost of certain property that the corporation elected to expense under section 179 from Form 4562. Include amounts not claimed on Form 1125-A or elsewhere on the return.
LINE 21. DEPLETION
To check the percentage of depletion rates that is applicable to nature deposits, see sections 613 and 613A.
To find out the limitation on the depletion deduction for iron ore and coal, see section 291.
Attach Form T (Timber), Forest Activities Schedule, if the depletion of timber is taken for a deduction.
LINE 22. ADVERTISING
Provide the expenses for activities such as email newsletter, pay-per-click advertising, SEO services, etc.
LINE 23. PENSION, PROFIT-SHARING, ETC., PLANS
Enter the deduction for contributions to qualified pension, profit-sharing, or other compensation plans.
Employers who maintain a plan must file one of the forms in the following:
- Form 5500
- Form 5500-SF
- Form 5500-EZ
LINE 24. EMPLOYEE BENEFIT PROGRAMS
The employee benefit programs must be provided and not claimed elsewhere on the return that are not part of a profile-sharing, pension, and others incidentally included on line 23.
LINE 25. RESERVED FOR FUTURE USE
Provide the amount allocation for future business use purposes.
LINE 26. OTHER DEDUCTIONS
You must have an attached statement, list by type and amount, and allowable deductions that are not actually deductible elsewhere on Form 1120. Then enter the total on line 26.
LINE 27. TOTAL DEDUCTIONS
Sum the entered amounts from line 12 through 26.
LINE 28. TAXABLE INCOME BEFORE NOL DEDUCTION AND SPECIAL DEDUCTIONS
Subtract line 27 from line 11. However, special at-risk under section 465 apply to closely held corporations engaged in any activity as a trade, business or for the production of income.
Changes of the amount may have applied on line 28. Herein, the at-risk rule does not apply to:
- Holding real property placed in service by the taxpayer before 1987;
- Equipment leasing under sections 465(c)(4), (5), and (6); or
- Any qualifying business of a qualified corporation under section 465(c)(7).
LINE 29A. NET OPERATING LOSS DEDUCTION
You can use the Net Operating Loss (NOL) incurred in one year tax to condense its taxable income for another tax year. On line 29a, enter the total NOL carryovers from other tax years, but be informed that you do not need to input beyond the taxable income of the corporation.
Attach a statement stating the computation of the NOL deduction. Complete item 12 on Schedule K.
LINE 29B. SPECIAL DEDUCTIONS
Apply the instructions given on Schedule C, line 24.
LINE 29C. TOTAL DEDUCTIONS
Simply sum the line 29a and line 29b.
LINE 30. TAXABLE INCOME
To get the minimum taxable income, subtract line 29c from line 28.
Taxable income should not accumulate below than the largest amounts as follows:
- Inversion gains of the corporation’s tax year, if the corporation is an expatriated entity or a partner in an expatriated entity.
- The total of the corporation’s excess inclusions from the residual interest in a REMIC from Schedules Q (Form 1066), line 2c, and the corporation's taxable income determined solely with respect to its ownership and high-yield interests in FASITs.
LINE 31. TOTAL TAX
Apply the instructions given on Schedule J, Part 1, line 11 to accumulate the total tax.
LINE 32. 2019 NET 965 TAX LIABILITY PAID
Apply the instructions given on Schedule J, Part 2, line 12.
LINE 33. TOTAL PAYMENTS, CREDITS, AND SECTION 965 NEXT TAX LIABILITY
- Apply the instructions given on Schedule J, Part 3, line 23.
LINE 34. ESTIMATED TAX PENALTY
There is no need to file Form 2220 as the IRS can examine the penalty amount.
If the corporation does not owe a penalty, please attach Form 2220 and have the following completed:
- The annualized income or adjusted method is used, or
- A large corporation must calculate its first required installment founded on the prior year’s tax.
Note: Check the box on line 34 and enter any penalty on this field when Form 2220 is attached.
LINE 35. AMOUNT OWED
See If line 33 is smaller than the total of lines 31, 32, and 34, enter the amount owed.
If a corporation cannot pay the full amount of tax owed. They are permitted to pay in an installment plan online in the following:
- It cannot pay the full amount shown on line 35.
- The corporation is committed to pay the arrangement and liability in 24 months.
For arranging an Online Payment Agreement Application, visit the official website of internal revenue service.
LINE 36. OVERPAYMENT
Review If line 33 is larger than the total of lines 31, 32, and 34, then enter the amount owed.
LINE 37. CREDIT
Input the amount of any overpayment that should be refunded or applied to next year's estimated tax.
Before you sign and date this form, please check and review the information you provided to avoid legal consequences under penalties of perjury.
SCHEDULE C. DIVIDENDS, INCLUSIONS, AND SPECIAL DEDUCTIONS
LINE 1, COLUMN (A)
Enter the dividends that accumulated less-than-20%-owned domestic corporations for income tax.
A qualified 50% deduction under section 243(a)(1).
Taxable distributions from an IC-DISC or former DISC that are designated as eligible for the 50% deduction and certain dividends of Federal Home Loan Banks, or the dividends from regulated investment company (RIC).
LINE 2, COLUMN (A)
Enter the dividends collected from 20%-or-more-owned domestic corporations for income tax and that are subject to the 65% deduction under section 243(c).
Having 65% deduction is considered as eligible for taxable distributions from an IC-DISC or former DISC.
LINE 3, COLUMN (A)
Enter the dividends collected on certain debt-financed stock attained after July 18, 1984, from domestic and foreign corporations subject to income tax that would otherwise be subject to the dividends-received deduction under section 243(a)(1), 243(c), or 245(a).
Enter the dividends obtained from a RIC on the debt-financed stock.
LINE 3, COLUMNS (B) AND (C)
The 50% or 65% deduction is reduced by a percentage that is related to the amount of debt sustained to get the stock.
Attach statement Form 1120 stating how the amount on line 3, column (c), was calculated.
Note: Accumulated dividends on certain debt-financed stock acquired after July 18, 1984 will not be entitled to the full 50% or 65% dividends-received deduction under section 243 or 245(a).
LINE 4, COLUMN (A)
Enter the dividends obtained from preferred stock of a less-than- 20%-owned public utility that is subject to income tax and is allowed the 23.3% deduction provided in sections 244 and 247 for paid dividends.
LINE 5, COLUMN (A)
Enter the dividends obtained from preferred stock of a 20%-or-more-owned public utility that is subject to income tax and is allowed the 26.7% deduction provided in sections 244 and 247 for paid dividends.
LINE 6, COLUMN (A)
You can only put the U.S. source portion of dividends in the following:
- Obtained from less-than-20%-owned foreign corporation.
- Qualified for the 50% deduction under section 245(a).
- Dividends obtained from a less-than-20%-owned FSC that are attributable on income treated as effectively connected with the conduct of a trade or business within the United States and;
- Qualified for the 50% deduction under section 245(c)(1)(B).
LINE 7, COLUMN (A)
You can only put the U.S. source portion of dividends in the following:
- Obtained from 20%-or-more-owned foreign corporations
- Qualified for the 65% deduction under sections 243 and 245(a).
- Dividends obtained from a 20%-or-more-owned FSC that are attributable to income treated as effectively connected with the conduct of a trade or business within the United States and;
- Qualify for the 65% deduction under section 245(c)(1)(B).
LINE 8, COLUMN (A)
Provide the dividends obtained from 100% owned foreign subsidiaries and are eligible for the 100% deduction under section 245(b).
LINE 9, COLUMN (C)
Sum lines 1 through 8.
The line 9 cannot go over the amount from the Worksheet for Schedule C. Yet, In a year in which an NOL occurs, this limitation does not apply even if the loss is created by the dividends-received deduction.
LINE 10, COLUMNS (A) AND (C)
Small business investment companies operating under the Small Business Investment Act of 1958 must provide dividends that are obtained from domestic corporations subject to income tax, even a deduction is allowed for the entire amount of those dividends.
Note: To have the privilege of the 100% deduction on line 10, column (c), the company must submit with a return statement that it was a federal licensee under the Small Business Investment Act of 1958 at the time it received the dividends.
LINE 11, COLUMNS (A) AND (C)
You can only provide the qualifying dividends under section 243(b) for the 100% dividends-received deduction described in section 243(a)(3).
The 100% deduction does not apply to associated group members that are joining in the filing of a consolidated return.
LINE 12, COLUMN (A)
Provide the dividends that are eligible for the 100% deduction as stated in section 245(c)(1)(A) and FSCs that are attributable to foreign trade income.
LINE 13, COLUMN (A)
Include the foreign-source portion of dividends entered that has specified 10%-owned foreign corporations, including gain from the sale of stock of a foreign corporation that is treated as a dividend under sections 1248(a), and qualified for the section 245A deduction
LINE 14, COLUMN (A)
Enter foreign dividends not reportable on line 3, 6, 7, 8, 11, 12, or 13 of column (a).
Include any hybrid dividends from a controlled foreign corporation (CFC) included.
The corporation's share of distributions from a section 1291 fund from Form 8621 should also be included, to the extent that the amounts are taxed as dividends under section 301.
LINE 15, COLUMN (A)
Provide your 2019 section 965(a) inclusion amount from Form 965, line 3. Attach Form 965 and any applicable schedules, as well as Form 965-B, and have these all completed.
LINE 15, COLUMN (C)
In column (c), enter the 2019 section 965(c) deduction amount from Form 965, line 17.
LINE 16A, COLUMN (A)
Include foreign-source portion of any subpart F inclusions attributable to the sale or exchange by a CFC of stock in another foreign corporation described in section 964(e)(4).
The U.S. shareholder’s pro rata shares of the amount reported on Form 5471, Schedule I, line 1a, must be identical.
LINE 16B, COLUMN (A)
Enter the pro rata share of subpart F inclusions attributable to hybrid dividends of tiered corporations under section 245A(e)(2). This should equal the U.S. shareholder's pro rata share of the amount reported on Form 5471, Schedule I, line 1b.
The U.S. shareholder's pro rata shares of the amount reported on Form 5471, Schedule I, line 1b, must be identical.
LINE 16C, COLUMN (A)
Provide all other amounts of income under section 951.
The U.S. shareholder's pro rata shares of the sum of the amounts reported on Form 5471, Schedule I, lines 1(f), 2, 3, and 4, must be identical.
LINE 17, COLUMN (A)
Please have the amounts included in income under section 951A. See Form 8992, Part II, line 5, for further instructions. Attach Form(s) 5471, if applicable.
LINE 18, COLUMN (A)
Have the gross-up for taxes deemed paid under sections 902 and 960 included.
LINE 19, COLUMN (A)
Provide the taxable distributions from an IC-DISC or former DISC that are ordained as not eligible for a dividends-received deduction.
No deduction is allowed under section 243 for a dividend from an IC-DISC or former DISC.
LINE 20, COLUMN (A)
For line 20, column (a) please have following included:
- Acquired dividends from RICs and are not subject to the 50% deduction.
- Dividends from tax-exempt organizations.
- Acquired dividends from REIT – for the tax year of the trust, to which the dividends are paid, qualifies under sections 856 through 860.
- Dividends is Ineligible for dividends-received deduction, which includes the following:
- Collected dividends on any share of stock held for less than 46 days during the 91-day period beginning 45 days before the ex-dividend date.
- Dividends are attributable to periods with a totality of more than 366 days. Thus, the corporation received any share of preferred stock held for less than 91 days during the 181-day period that began 90 days before the ex-dividend date.
- Dividends on any share of stock to the extent the corporation is under a commitment to make related payments with respect to positions in substantially similar and/or related property.
- Any other taxable dividend income that is not properly reported elsewhere on
LINE 21, COLUMN (C)
You can provide either the dividends paid on their preferred stock during the tax year or taxable income computed without regard to this deduction.
LINE 22, COLUMN (C)
Provide the section 250 deduction claimed for FDII and GILTI.
Note: This should have the same sum of the amounts on Form 8993, Part IV, lines 8 and 9.
LINE 23, TOTAL DIVIDENDS AND INCLUSIONS
Dois simply by adding th column (a), from line 9 to line 20. Then, enter your computation in this section and on page 1, line 4.
LINE 24, TOTAL SPECIAL DEDUCTIONS
You can find the sum of total special deductions by adding column (c), from line 9 to line 22. Then, enter your computation in this section and on page 1, line 29b.
Schedule J. Tax Computation and Payment
PART 1—TAX COMPUTATION
You can check the box on line 1 If the corporation is a member of a controlled group. Then, attach Schedule O (Form 1120), Consent Plan and Apportionment Schedule for a Controlled Group, and have these all completed.
Multiply the taxable income from page 1, line 30 by 21%. Then, enter your computation on line 2.
Read the special instructions as follows:
- MUTUAL SAVINGS BANK CONDUCTING LIFE INSURANCE BUSINESS
The tax under section 594 entails the sum of the calculated partial tax from Form 1120 on the taxable income of the bank, determined without regard to income or deductions allocable to the life insurance department, and the computed taxable income on Form 1120-L of the life insurance department of its partial tax.
Then, attach Form 1120-L as a schedule, along with the annual statements and schedules required to be filed with Form 1120-L.
- EXCLUSION FOR INSURANCE COMPANIES FILING THEIR FEDERAL INCOME TAX RETURNS ELECTRONICALLY
The annual statements must not be included and schedules required to be filed with Form 1120-L.
- DEFERRED TAX UNDER SECTION 1291
Being a shareholder in a PFIC and receiving an excess of distribution or disposal investment in the PFIC during the year should show the increase in taxes due under section 1291(c)(2) from Form 8621 in the total for line 2. See the dotted line next to line 2. Then, have the “Section 1291” and the amount provided.
- INCREASE IN TAX ATTRIBUTABLE TO PARTNER'S AUDIT LIABILITY UNDER SECTION 6226
You can attach Form 8978 if it has a decrease in tax on Form 8978, line 14. Then, see the instructions for Schedule J, line 6.
- ADDITIONAL TAX UNDER SECTION 197(F)
A corporation that chooses to recognize gain and pay tax of the sale section 197 that is intangible under the related person exception to the anti-churning rules should include any additional tax due in the total for line 2. See the dotted line next to line 2, then enter “Section 197” and the amount.
If your corporation had at least $500 million of its gross receipts in any one of the 3 tax years preceding the current tax year, attach Form 8991. On line 3, put base erosion minimum tax amount from Form 8991, Part IV, line 5e. Also, read section 59A and the Instructions for Form 8991.
Find the sum of lines 2 and 3. Then, enter your computation.
See Form 1118, Foreign Tax Credit—Corporations to check when your corporation is allowed to take credit for payment of income tax to other countries or U.S. possession.
Provide and attach Form 8834 for qualified electric vehicle passive activity credits from prior years allowed for the current tax year from Form 8834, Qualified Electric Vehicle Credit, line 7.
On this line, input the allowable credit from Form 3800, Part II, line 38.
Attach Form 8827, Credit for Prior Year Minimum Tax—Corporations to find out the minimum tax credit and any carryforward of that credit.
Code the allowable credits from Form 8912, Credit to Holders of Tax Credit Bonds, line 12.
Find the sum of lines 5a through 6. Then, enter your computed amount.
Subtract line 6 from line 4
Under section 542, personal holding company will be taxed, only if;
- A minimum of 60% is adjusted of its ordinary gross income for the tax year and income of a personal holding company.
- At any moment throughout the last half of the tax year with more than 50% value of its outstanding stock, which is directly or indirectly owned by five or fewer individuals.
Line 9a. Recapture of investment credit.
Disposed investment credit property or if there are changes of its usage before the termination of its function or recovery time, or obliged to recapture a qualifying therapeutic discovery project grant. Enter the surged tax from Form 4225, Recapture of Investment Credit.
Line 9b. Recapture of low-income housing credit.
A corporation may have owed a tax, If the corporation disposed of property as it seized the low-income housing credit, and does not follow the protocol which would have avoided the recapture of the credit.
Line 9c. Interest due under the look-back method—completed long-term contracts.
Complete Form 8697 to find out any interest due or anything that will be refunded. This is applicable if the corporation has used the percentage-of-completion method under section 460(b).
Line 9d. Interest due under the look-back method—income forecast method.
Complete Form 8866 to find out any interest due or anything that will be refunded. Applicable only if the corporation has used the income forecast method to depreciate property.
Line 9e. Alternative tax on qualifying shipping activities.
Provide the alternative tax on qualified shipping activities from Form 8902.
Line 9f. Other.
For this line, attach a statement that shows the calculation of each item indicated and have the applicable code section and type of tax or interest classified.
To find the total, add lines 9a through 9f.
If applicable, you must include any deferred tax on the termination of a section 1294 election.
Deduct the following amounts from the total for line 11:
- The deferred tax of the corporation’s share of undistributed earnings of a qualified electing fund.
- Deferred LIFO recapture tax.
STEPS FOR FINDING THE TOTAL LIFO
Compute Schedule J Part I, lines 1 through 10. Then, find the tax of the corporation’s income which includes the LIFO recapture amount.
In a separate sheet, complete Schedule J again, but including the LIFO recapture amount in the corporation's taxable income is not necessary.
Now, compare and differ the tax in Step 2 to the tax in Step 1. The insignificant result between the two is the LIFO recapture tax.
The figured amount from Step 3 must be multiplied by 75% (0.75). The result is the deferred LIFO recapture tax.
Lastly, attach a statement showing how deferred LIFO recapture is being computed. Then, see the dotted line next to line 11, specify (a) the applicable Code section, (b) the type of tax, and (c) enter the amount of tax.
PART 2 – SECTION 965 PAYMENTS
Fill out and attach Form 965-B. Next, enter the amount from Form 965-B, Part II, column (k), line 3, on Schedule J, Part II, line 12. Then, provide the amount on page 1, line 32.
PART 3—PAYMENTS, REFUNDABLE CREDITS, AND SECTION 965 NET TAX LIABILITY
Enter last year’s overpayment credited to present year.
Provide the estimated tax payments that the corporation made for the tax year.
Include the corporation’s share of the payment in total for line 14 if it is a beneficiary of trust. Enter “T” and the amount on the dotted line next to the entry space.
You can process a Form 4466 to get a refund if the corporation overpaid the estimated tax. The Form 4466 must be filed before the corporation files its tax return.
Add the line 13, 14 and 15 to get the total amount.
Provide the tax deposited together with the Form 7004.
If there had a federal income tax withheld from any payments it obtained, input the amount withheld in total for line 18.
To get the total payment, you can just add 16, 17, and 18.
LINE 20 – REFUNDABLE CREDITS
Line 20a. Credit from form 2439
Provide the amount of credits from Form 2439, a Notice to Shareholder of Undistributed Long-Term Capital Gains, for the corporation's share of the tax paid by a regulated investment company (RIC) or a real estate investment trust (REIT) on undistributed long-term capital gains included in the corporation's income and attach Form 2439.
Line 20b. Credit for federal tax on fuels
Attach Form 4136 and code the total income tax credit claimed on Form 4136, Credit for Federal Tax Paid on Fuels.
Line 20c. Refundable credits from form 8827.
Provide the amounts from Form 8827, line 5c.
Line 20d. Other
Consider adding the other refundable credit with an attached statement listing the type of credit and amount of the credit. Please also include the following:
- Credit for tax withheld under Chapter 3 or 4 of the Internal Revenue Code shown on Form 1042-S, Form 8805, or Form 8288-A.
- Credit for tax on ozone-depleting chemicals.
- Credit under section 960(c).
Combine lines 20a through 20d to get the total credits
Finish and attach Form 965-B. Then, provide the amount from Form 965-B, Part I, column (d), line 3.
Add lines 19, 21, and 22 to get the total payments, credits, and section 965 net tax liability. Indicate here on this field and page 1, line 33.
SCHEDULE K. OTHER INFORMATION
Complete all items and cascading questions that apply to the corporation.
Mark the accounting method, either for cash, accrual, or others (specify).
See the list of Principal Business Activity Codes, and you then can determine which activity the corporation derives the highest percentage of its total receipts using the list of codes and activities.
Then enter it on lines 2a, 2b, and 2c the principal business activity code number, the corporation's business activity, and a description of the principal product or service of the corporation.
You can only check the “YES” box for this question if:
- An affiliated group is a subsidiary of the corporation, but will not file a consolidated return for the tax year.
- A parent–subsidiary controlled group is a subsidiary of the corporation. See instructions for Schedule O (Form 1120) to define a parent–subsidiary controlled group. Then, enter the name and EIN of the parent corporation.
QUESTION 4. CONSTRUCTIVE OWNERSHIP OF THE CORPORATION
The constructive ownership rules apply to ownership of interests in corporate stock and ownership of interests in the capital, loss, or profit capital of a partnership. If the corporation agrees to either 4a or 4b questions, attach Schedule G (Form 1120), Information on Certain Persons Owning the Corporation's Voting Stock.
QUESTION 5. CONSTRUCTIVE OWNERSHIP OF OTHER ENTITIES
The constructive ownership rules are applicable to ownership of interests in partnerships, trusts, and corporate stock. if an entity is owned, directly or indirectly, by or for another entity, the owned entity is considered to be owned proportionately by or for the owners of the owning entity.
Mark the “YES” box if at the end of the tax year that the corporation owned directly 20% or more, or owned, directly or indirectly, 50% or more of the total voting power of all classes of stock entitled to vote. Then add the Name of the Corporation, EIN if there’s any, Country of Incorporation, and Percentage Own in Voting Stock. Otherwise, mark “NO.”
Mark the “YES” box if at the end of the tax year that the corporation owned directly an interest of 20% or more, or owned, directly or indirectly, an interest of 50% or more in the profit, loss, or capital of the partnership. Then add the Name of the Corporation, EIN if there’s any, Country of Organization, and Maximum Percentage Owned in Profit, Loss, or Capital. Otherwise, mark “NO.”
Mark “YES” if the corporation pays dividends in excess of the corporation’s current and accumulated earnings and profit. Then file Form 5452. If this would be for a consolidated return, answer parent corporation and Form 851 for each subsidiary. Otherwise, mark “NO.”
Mark “YES” if at any moment during tax year, one foreign person own, directly or indirectly, at least 25% of the total voting power of all classes of the corporation’s stock is entitled to vote or at least 25% of the total value of all classes of the corporation’s stock. Then enter (a) Percentage owned, (b) Owner’s Country, and (c) number of Form 5472. Otherwise, mark “NO.”
Mark the box if the corporation issued publicly offered debt instruments with original issue discounts. If so, the corporation may need to file Form 8281.
Provide the amount of tax-exempt interest accumulated during the tax year.
Provide the number of shareholders at the end of the tax year.
Mark the box if the corporation has an NOL for the tax year and is electing to forego the carryback period.
If filing a consolidated return, the statement required by Regulations section 1. Attach 1502-21(b)(3).
Indicate the available NOL carryover from prior tax years.
Note: do not reduce it by any deduction reported on page 1, line 29a.
Mark “YES” if the corporation’s total receipts for the tax year and its total assets at the end of the tax year are less than $250,000. Then, enter the total amount of cash distributions and the book value of property distributions made during the tax year only. Otherwise, mark “NO.”
If it agrees (YES) that the corporation is required to file Schedule UTP (Form 1120), Uncertain Tax Position Statement. Complete and attach Schedule UTP.
Mark “YES” if the corporation was able to make any payments in 2020 that would require it to file Form(s) 1099.
If “YES,” answer “YES” or “NO” if the corporation did or will the corporation file have required Form(s) 1099.
Mark “YES” if the corporation has an 80%-or-more change in ownership, including a change due to redemption of its own stock during this tax year. Otherwise, mark “NO.”
Mark “YES” If the corporation disposes of more than 65% (by value) of its assets in a taxable, non-taxable, or tax deferred transaction during or subsequent to this tax year, but before filing of this return. If not, mark “NO.”
Mark “YES” if the corporation receives assets in a section 351 transfer in which any of the transferred assets had a fair market basis or fair market value of more than $1 million. Otherwise, mark “NO.”
Mark “YES” if the corporation’s tax year, did the corporation make any payments that would require it to file Forms 1042 and 1042-S under chapter 3 or chapter 4 of the Code. Otherwise, mark “NO.”
Mark “YES” if the corporation operates on a cooperative basis. If not, mark “NO.”
Mark “YES” if the corporation pays or accrue any interest or royalty for which the deduction is not allowed under section 267A. Otherwise, mark “NO.”
If YES, indicate the total amount of the disallowed deductions.
Mark “YES” if the corporation has gross receipts of at least $500 million in any of the 3 preceding tax years. If so, please complete and attach Form 8991.
Mark “YES” if the corporation has an election in effect under section 163(j) for any real property trade or business or any farming business in effect during the tax year. If not, mark “NO.”
If the corporation agrees on one or more of these statements. Mark “YES” and attach Form 8990. Otherwise, mark “NO” and jump onto the next question.
- The corporation owns a pass-through entity with current, or prior year carryover, excess business interest expense.
- The corporation’s aggregate average annual gross receipts (determined under section 448(c)) for the 3 tax years preceding the current tax year are more than $26 million and the corporation has business interest expense.
- The corporation is a tax shelter and the corporation has business interest expense.
Mark “YES” if the corporation attaching Form 8996 to certify as a Qualified Opportunity Fund. Then, enter the amount from Form 8996, line 15. Otherwise, mark “NO.”
SCHEDULE L. BALANCE SHEETS PER BOOKS
Include certificates of deposit as cash on these fields.
Enter the trade notes and accounts receivable
Provide less allowance for bad debts
Indicate the corporation’s inventories
Enter the U.S. government obligations.
Include the state and local government obligations, the interest on which is excludable from gross income under section 103(a). Also, the stock in a mutual fund or other RIC that is distributed exempt-interest dividends during the tax year of the corporation.
Attach a statement for other current assets.
Provide the loans to shareholders.
Provide the mortgage and real estate loans.
Attach a statement for other investments.
Provide the buildings and other depreciable assets.
Indicate the less accumulated depreciation.
Provide the depletable assets.
Indicate the less accumulated depletion.
Provide the land’s any net of amortization.
Provide the intangible assets (amortizable only)
Indicate the less accumulated amortization
Attach a statement for other assets.
Indicate the total assets.
Liabilities and Shareholders’ Equity
Enter the accounts payable.
Provide the mortgages, notes, bonds payable in less than 1 year.
Attach a statement for other current liabilities.
Indicate the loans from shareholders.
Include mortgages, notes, bonds payable in 1 year or more.
Attach a statement for other liabilities.
Include the following capital stock:
Provide the additional paid-in capital.
Attach a statement for retained earnings—Appropriated.
Include the retained earnings—Unappropriated.
Attach a statement for adjustments to shareholders’ equity.
Provide the less cost of treasury stock.
Code the total liabilities and shareholders’ equity.
SCHEDULE M-1. RECONCILIATION OF INCOME (LOSS) PER BOOKS WITH INCOME PER RETURN
The corporation may be required to file Schedule M-3.
Enter the net income loss per book.
Enter the Federal income tax per book.
Enter the excess of capital losses over capital gains.
List each income subject to tax not recorded on books this year.
List down the expenses recorded on books this year not deducted on this return for each category in the following:
- Travel and entertainment.
Find the sum from line 1 through line 5.
List down the income recorded on books this year not included on this return (Tax-exempt interest).
List down the deductions on this return not charged against book income this year for each category in the following:
Add lines 7 and 8.
Provide the income from page 1, line 28 and line 6 less line 9.
SCHEDULE M-2. ANALYSIS OF UNAPPROPRIATED RETAINED EARNINGS PER BOOKS (SCHEDULE L, LINE 25)
Enter the balance at the beginning of the year.
Indicate the net income loss per book.
List down the other increases.
Get the sum of lines 1 through 3.
List down the distributions in the following:
List down the other decreases.
Get the sum of lines 5 and 6.
Compute the balance at the end of year. Line 4 minus line 7.
Where do I file Form 1120?
Filing a Form 1120 can be done both mail and electronic mail, and any other forms and files. You can print the form by visiting the official website of internal revenue service.
If you wish to mail your return, a private delivery services (PDS) should be used and include the written proof or evidence of the mailing date.
You could also authorize your tax payment withdrawn electronically from your account or direct deposit of a refund if you owe IRS taxes.
What do I need to know?
To assure that you correctly process your corporation’s tax return, please be informed that you need to attach all schedules and other forms after page 6 of Form 1120 in the following arrangement:
- Schedule N (Form 1120)
- Schedule D (Form 1120)
- Form 8949
- Form 8996
- Form 8050
- Form 1125-A
- Form 4136
- Form 8978
- Form 965-B
- Form 8941
- Form 3800
- Form 6252
- Additional schedules in alphabetical order
- Additional forms in numerical order
- Supporting statements and attachments
Fill out every entry field on Form 1120. Please be advised that you do not have to enter “See Attached” or “Available Upon Request,” otherwise, complete all entry levels. If in case you need more space, please have a separate sheet using the same size and format as these printed forms.
Arrange all supporting documents and materials in the same order as the stated above. Ensure that each supporting document or materials have the corporation’s name and EIN encoded.