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Form 1120-A (for 1120, the long form) reports your corporation's taxable income to the IRS.
The corporation should have already paid quarterly federal income tax deposits with
the EFTPS online system.
Any balance due for federal taxes should be paid online with EFTPS.
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| After you have paid federal and state corporate taxes, you can distribute profits to your
shareholders (called dividends). Your corporation and shareholders must report dividend
income using IRS 1099-Div. Shareholders must pay taxes on these dividends on their
annual IRS 1040 tax return. |
| Forms to use | | 1120 Annual Tax Return for C Corporations |
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| Who can use the short form 1120-A? | |
Corporations which meet both these criteria can use the short 1120-A form:
- No foreign ownership or income and have receipts
- Assets less than $500,000
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| How often | |
Annual requirement |
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| How to complete 1120 | |
| Line | What to enter |
| 1-11 | Income less cost of goods sold. Cost of goods is calculated by
taking inventory at the start of the year, adding purchases and labor costs
and then subtracting inventory at the end of the year. |
| 12-25 | Overhead expenses. Include state income tax.
If you have depreciable equipment or start-up costs (which should be amortized), you
will need to attach IRS 4562.
Note: Your tax preparer will need a separate list of any equipment that you purchased
(purchase price and the purchase date), your start-up costs, auto expenses, and any funds that went to or from shareholders. To prevent double-counting,
do not include any of these items when calculating your net income. |
| 27 | Calculate tax:
- 15% for the first $50,000 net taxable revenue
- 25% of the next $25,000 net taxable revenue
- 34% of the balance up to $9,925,000
If you are a personal service corporation, pay 35% on all net taxable revenue.
Now subtract any credits or payments made. |
| Part I | Tax Computation. This section only pertains if you had tax credits
or are a personal service corporation. |
| Part II | Information. Your tax advisor should help with this section.
Question 5, section 263A costs, concerns businesses with over $10 million in receipts. |
| Part III | Balance sheet at the beginning and the end of the year.
| | Part IV | Reconcile accounting methods. This is only required if your assets
at year-end are $250,000 or more. In this section, you must reconcile
the differences between tax and book accounting (normally these are in the area of depreciation
and tax credits). |
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| What to do | |
Payment: If federal taxes are owed for 1120,
pay online with EFTPS. Hopefully, you won't have any tax due,
because the tax rules require 100% of tax to be deposited in quarterly estimated tax payments.
Small corporations may pay 100% of last year's tax.
Filing:Submit 1120 to the IRS.
IRS
Ogden, UT 84201-0012
You may also file 1120 on the web. The approved providers are listed at http://www.irs.gov/efile/lists/0,,id=119096,00.html.
The providers include RIA Compliance, Internet Programming and Filing, Creative Solutions, CCH, and Drake Software.
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| Due date | |
March 15th or the 15th day of the 3rd month after the corporation's tax year-end.
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| Questions? | |
Call the IRS information hotline (800) 829-4933. For forms, call
(800) 829-3676 or obtain them online at http://www.irs.gov/formspubs/index.html. |
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