If you have a business, then you must be aware of your federal tax obligations. If your business is a C Corporation then you must file IRS Form 1120 every year or face unpleasant and expensive consequences. The only way out of paying federal income tax on your corporation is if you have achieved tax-exempt status under section 501. There is a process for applying for tax-exempt status, which is for organizations like churches, research groups, and other not-for-profit organizations.
Even if your business is in bankruptcy, IRS Form 1120 is still required. If your business is an LLC and you chose to be taxed as a corporation, IRS Form 1120 is the form you would use. You would have had to have filed IRS Form 8832 in order to elect to be treated as a Corporation for tax purposes.
Important Tips About IRS Form 1120
First of all, note the due date for Corporate tax returns. IRS form 1120 is due March 15 after the tax year closes. That’s a whole month earlier than individual income tax returns, which are due April 15.
Second of all, it’s good to start preparing your Form 1120 way ahead of schedule because there are certain bits of information that are required from the 1120, which are necessary for submitting other IRS tax forms. For example, IRS Form 941, Employer’s Federal Quarterly Tax Return, is due January 31 following the end of the fourth quarter of the tax year. So, for the fourth quarter of 2013, the 941 is due January 31, 2014. You would need to know how much you reported as paid in wages on your 1120 in order to correctly fill out the 941. This is especially true of corporations that have only one shareholder (small business), who are also likely to be S-corporations. S-Corps file the IRS Form 1120S, which is very similar to the 1120 of course.
Thirdly, as a small business owner, purchasing TurboTax or a comparable commercial tax software provider, is essential to do doing business. It costs about $15 per year and is way cheaper than hiring an accountant. If you file your IRS Form 1120 through something like TaxAct or TurboTax, you will file electronically and everything is so very simple and easy.