What Form 1120 (2011) Is For
IRS Form 1120 (2011) is the federal income tax return used by domestic corporations to report income, deductions, credits, and determine tax liability for the 2011 tax year. It serves as the corporate equivalent of an individual tax return, ensuring that all taxable income is reported correctly to the IRS. Both calendar-year and fiscal-year taxpayers use this form to calculate their total federal tax obligation or potential refund.
All C corporations, including certain corporations in bankruptcy and some foreign corporations with U.S. income, are required to file Form 1120 unless they qualify for an alternative filing category, such as an S corporation, which uses Form 1120-S. The form provides a complete record of the corporation’s financial activity, including income sources, deductions, and payments made during the tax period.
When You’d Use Form 1120
Corporations use Form 1120 to report taxable income, deductions, credits, and payments for a specific tax year. It applies to domestic corporations, C corporations, and certain corporations with fiscal years different from the calendar year. Corporations must file even if they had no income or operated at a loss.
This form is also used when filing amended returns, reporting short tax years, or adjusting prior years’ filings. Corporations that fail to timely file by the due date—usually the 15th day of the third month after the tax year ends—may face penalties, unless reasonable cause is established.
For complete details on wage reporting, withholdings, and unemployment tax filings, see our guide to Business Income Tax Forms.
Key Rules or Details for 2011
Several key regulations applied to Form 1120 for the 2011 tax year.
- Corporations were required to make all federal tax deposits electronically through the Electronic Federal Tax Payment System (EFTPS). Paper deposit coupons (Forms 8109 and 8109-B) were no longer accepted.
- Two new supplementary forms became mandatory, for example, Form 1125-A for cost of goods sold and Form 1125-E for officer compensation when total receipts exceeded $500,000.
- Corporate tax rates for 2011 followed a graduated structure, for example, 15% on the first $50,000 of taxable income, 25% on taxable income between $50,000 and $75,000, and 34% on taxable income between $75,000 and $100,000, with a rate of 35% applicable to taxable income exceeding $100,000. Personal service corporations were taxed at a flat 35% rate.
- Corporations expecting to owe $500 or more were required to make quarterly estimated tax payments on the 15th day of the fourth, sixth, ninth, and twelfth months of the tax year. Failure to make these payments could result in underpayment penalties.
Step-by-Step (High Level)
Step 1: Gather Financial Records
Corporations must collect income statements, balance sheets, and documentation for receipts, deductions, and prior payments.
Step 2: Complete the Income Section
Report gross receipts, cost of goods sold (using Form 1125-A if applicable), and other income sources such as dividends or capital gains.
Step 3: Calculate Deductions
Itemize business expenses, including officer compensation, salaries, rent, taxes, depreciation, and advertising. Corporations with receipts over $500,000 must complete Form 1125-E.
Step 4: Complete Required Schedules
Include Schedules C, J, K, L, and M-1 to report dividends, tax computation, balance sheets, and reconciliation of income.
Step 5: Compute Tax Liability
Apply the correct tax rates and include any applicable credits or alternative minimum taxes.
Step 6: Determine Payment or Refund
Compare total estimated tax payments and credits against tax liability to determine whether an additional fee is due or a refund is expected.
Step 7: Sign and File
An authorized corporate officer, such as a president, vice president, or treasurer, must sign the return. File electronically through IRS-approved systems or mail to the appropriate IRS service center.
Common Mistakes and How to Avoid Them
Corporations often make errors that delay processing or result in penalties. Reviewing the return carefully before submission helps prevent these issues:
- Using an incorrect Employer Identification Number: Corporations should ensure the EIN is accurate and matches IRS records exactly.
- Leaving required sections incomplete: Corporations must fill out all mandatory fields and avoid writing “See Attached” where direct entries are needed.
- Missing an authorized signature: The form must be signed by an authorized officer, such as the president, treasurer, or chief accounting officer, to be valid.
- Omitting mandatory schedules: Corporations should attach all applicable schedules, including Forms 1125-A and 1125-E, when required.
- Submitting inaccurate calculations: All mathematical computations should be verified for accuracy before submission.
- Failing to maintain supporting records: Corporations should retain financial records, receipts, and documentation for a minimum of three years after the filing date.
- Missing estimated payment deadlines: Estimated tax payments must be made on time to avoid penalties and interest charges.
Diligent review and timely filing help ensure the corporation’s return is processed smoothly and in full compliance with IRS requirements.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
Once a corporation files Form 1120, the IRS processes the return to verify accuracy, completeness, and consistency with information returns. The IRS may contact the taxpayer for clarification or corrections if discrepancies arise.
Corporations due a refund can receive it through direct deposit or apply the credit to their next tax year’s estimated tax payments. If the IRS identifies underpayment or errors, additional taxes, penalties, or interest may be imposed. Corporations should retain copies of their original returns, schedules, and supporting documents for at least three years to meet future reporting or amended return needs.
FAQs
What is IRS Form 1120 (2011) used for?
IRS Form 1120 (2011) is the official income tax retuthat rn domestic corporations use to report income, deductions, credits, and tax liability for the 2011 tax year. It determines the amount of federal tax corporations owe or the refund due.
Who must file Form 1120 for the 2011 tax year?
All domestic corporations, including C corporations, certain corporations in bankruptcy, and fiscal year taxpayers, are required to file Form 1120. Foreign corporations with U.S. income sources may also be required to file based on their taxable income and business activities in the United States.
When is the due date to file the 2011 corporate tax return?
Corporations must file their returns by the 15th day of the third month following the end of their tax year. For calendar year corporations, the due date was March 15, 2012, or the next business day if a legal holiday occurred.
How do estimated tax payments work for corporations?
Corporations expecting to owe at least $500 in federal tax must make estimated tax payments each quarter. These payments help cover their estimated tax liability and reduce underpayment penalties imposed by the IRS.
What penalties apply for late filing or payment of taxes?
Failure to file or pay tax on time may result in civil penalties or criminal penalties. The IRS generally imposes a 5% monthly penalty on unpaid taxes, plus interest, until the corporation fully pays its tax liability.
How can corporations claim a refund after paying excess taxes?
Corporations that overpay can claim a refund or apply the credit to a future tax period. Refunds may be deposited through a financial institution or payroll service, and claims must be submitted using proper IRS tax forms.
For more resources on filing or understanding prior-year IRS forms, visit our Form Summaries and Guides Library.
