Comprehensive Guide on 1120 Tax Form: Requirements & Purpose & How to Fill [2025]

The 1120 tax form is an official document that United States corporations use to report income, losses, and credits. It's an essential form and part of the U.S. tax system that ensures people fulfill their tax obligations. Moreover, filling out the form allows the IRS to access and collect the corporate income that maintains the overall federal law compliance. There are various requirements for this form, different for each.

Plus, these forms need to be timely and accurately filled, and in case of inaccurate reporting, it can lead to audits, penalties, and even legal actions. This article will provide an easy way to fill out this form, and that is by using UPDF as a form filler.

Part 1. What is Form 1120 Used For?

Generally speaking, all U.S. corporations must file this form under any circumstances. From a business standpoint, C corporations are the main entities required to file 1120 US tax forms. This can include publicly traded companies and small and medium-sized businesses. Moreover, it serves as the primary tax form that communicates a corporation's financial activity throughout the year.

1. Purpose of the Form

One of the primary purposes of the 1120 U.S. tax form is to enable C corporations to report their financial information to the IRS. Some of its other main purposes are given below:

1. Reporting Business Income & Activity: By reporting sales revenue, investment income, and capital gains reports of corporations, the IRS can understand how much a company makes in a year.
2. Deductions: With this form, a fair deduction of business expenses can be calculated as corporations fill out their employee wages, office rent, travel, and more.
3. Calculating and Paying Federal Income Tax: Once the income deduction is reported, the form is used to compute the company's tax liability, and it is generally 21%. 
4. Complying with IRS Regulations: Another purpose of this form is to maintain the corporation's good standards with the IRS and avoid penalties.

2. Filing Deadlines and IRS Requirements

You can look up the timeline for filling out the tax form 1120 as the tax year ends on 31st December. After that, every corporation has a deadline of the end of March. As for fiscal year corporations, the tax year ends on the last day of any month except December. Also, the filing deadline is the 15th day after 4 months of the last tax year. It's crucial to meet this filing deadline to avoid interest on late payments.

3. Key Sections of the Form

Users need to understand the key sections in the tax form 1120 include various critical areas of different corporations' financial situations, given as such:

• Income
• Deductions
• Tax Computation
• Credits
• Other taxes
• Payments and refundable credits
• Schedule L - Balance Sheets
• Schedule M-1 - Reconciliation of income

Part 2. What Do You Need to Prepare Before Filing?

The IRS posts the instructions for the 1120 tax form on its website every year. Every corporation needs to compile a number of financial statements and details regarding its activity to ensure smooth filing. You would need to prepare the following basic information:

1. Business Financial Records
2. Employer Identification Number (EIN)
3. Previous Tax Returns
4. Supporting Documents
5. Income Statements
6. Shareholder Information

Part 3. How to Fill Out Form 1120 Electronically

Though the 1120 tax form might look difficult to fill out, the major issue is to fill it out correctly and accurately. To make the process easy, it is recommended to use the UPDF Editor for effortlessly filling out any PDF form. This tool uses form field recognition to convert any non-fillable forms into fillable ones. It helps visualize all pre-existing fields for a convenient form-filling experience.

Moreover, fill out each section of the form separately with formatting, styling, and security options. Users can check spellings, scroll long text, allow rich text formatting, and many more with this form-filling feature. To keep the form safe for further editing, apply the Read-Only feature, along with a password. Companies can easily export the filled form data in various formats for submission on the IRS website.

Having learned how UPDF makes it 10 times easier to fill out the 1120 U.S. tax form, download it, and make this process seamless.

Steps on How to Fill Out Form 1120 with UPDF

Follow the given set of instructions on how to fill out the form with these steps:

Step 1. Install UPDF and Import the Tax Form 1120

When the PDF editor is installed, open its main interface and click the "Open File" button to insert the 1120 tax form.

Step 2. Access the Form Field Recognition

Next, on the main editing window, open the "Prepare Form" tab from the left panel and head to the top menu bar. From here, reveal the drop-down menu of the tool's icon, and choose the "Form Field Recognition" option to make everything accessible.

Step 3. Customize the Form

After that, double-click any box to open the right-side "Properties" panel. Now, write the "Name" and choose other important values. In the "Style" tab, personalize the formatting of the text, like color, alignment, and size. Once that's done, head to the "Action" tab and make the desired arrangements.

Step 4. Fill Out the Form

After that, switch to the Reader or Comment mode from the left panel, click the form fields and fill out them using UPDF. 

Step 5. Export the Filled Form

Upon doing so, go to the "File" tab at the top left corner and select the "Export To" option. On the extended menu, choose any format to download the final filled form.

Also Read:

• How to Fill Out 1040 >>
• How to Fill Out a 1099 Form >>

Part 4. Final Tips Before Submitting

In this part, you can find some of the best tips that you can follow before submitting Form 1120, given below:

1. Double-Check Information

You need to double-check all the information in the 1120 form, including spelling before you file it. You need to review closely the major numbers, like income, expenses, and deductions, as a single mistake can result in improper tax calculation. You need to double-check the corporation name, address, and EIN as well.

2. Review IRS Guidelines

The IRS always updates its instructions and requirements regularly, so it's important to consult the most recent instructions before filing. These guidelines provide details on how to correctly fill out the form, align with scheduled dates, and handle special tax situations. These include international income, consolidated group filings, and deductions with specific limits.

3. Keep a Copy of the Records

After you've filled out the form and sent it, you should keep a complete copy of the mailed 1120 tax form and accompanying documents. This should include attached schedules, supporting statements, and financial documents that could be useful in the event of a return. You should also keep these documents in a neat and readily accessible fashion for future reference, be it for an IRS audit or the filing of state taxes.

Conclusion

In conclusion, this article learned about the meaning of the 1120 tax form, its importance, and what type of requirement is necessary. Users can also find all the deadlines and preparation needed to fill out the form. To make the filling process easy, use the UPDF form-filling features.