What Form 1120 (2013) Is For
IRS Form 1120 (2013) is the annual U.S. Corporation Income Tax Return used by domestic corporations to report income, deductions, and tax liability to the Internal Revenue Service. It functions as the business counterpart to Form 1040, but it applies specifically to C corporations that pay tax on their own profits.
All U.S. corporations must file Form 1120 each year, even if they have no income or owe no tax. The form determines taxable income by subtracting allowable business deductions from total revenue and applying the applicable corporate tax rates. For tax year 2013, corporations used this form to report financial activity for the 2013 calendar year or any fiscal year ending in 2014.
When You’d Use Form 1120
Regular Filing
Calendar-year corporations were required to file by March 17, 2014. Fiscal-year filers followed the same rule—filing by the 15th day of the third month after the end of their fiscal year.
Extension Filing
Corporations that needed additional time could request a six-month extension by submitting Form 7004 by the original due date. The extension allowed extra time to file but not to pay. Any taxes owed still had to be paid by the original due date to avoid penalties and interest.
Late Filing
Corporations that missed the original deadline may still file Form 1120 for 2013 at any time. Penalties generally equal 5% per month of the unpaid tax, up to a total of 25%, with a minimum charge if payment is more than 60 days late. Filing late is better than not filing at all, since unfiled returns can remain open for IRS collection indefinitely.
Amended Filing
Corporations that discover errors or omissions after filing must use Form 1120-X (Amended U.S. Corporation Income Tax Return). The amended return must generally be filed within three years of the original filing or two years after payment, whichever is later.
For complete details on wage reporting, withholdings, and unemployment tax filings, see our guide to Business Income Tax Forms.
Key Rules or Details for 2013
Who Must File
All domestic C corporations were required to file, unless exempt under Section 501. This included inactive corporations, dissolved entities, and limited liability companies that elected corporate tax status using Form 8832.
Electronic Filing
Corporations with total assets of $10 million or more and that filed at least 250 returns annually were required to e-file. Other corporations could choose either paper or electronic filing, though e-filing was encouraged for faster processing.
Payment Method
All corporate tax payments and deposits were required to be made electronically through the Electronic Federal Tax Payment System (EFTPS). Paper checks were no longer accepted for most businesses.
Estimated Tax Requirements
Corporations expecting to owe $500 or more had to make quarterly estimated tax payments on the 15th day of the 4th, 6th, 9th, and 12th months of the tax year.
Schedule M-3 Requirement
Corporations with assets of $10 million or more had to file Schedule M-3 instead of Schedule M-1 to reconcile book income with taxable income.
Special 2013 Provision
Corporations could deduct charitable contributions made for Philippine typhoon relief between March 26 and April 15, 2014, on their 2013 returns.
Step-by-Step (High Level)
Step 1: Gather Records
Collect all financial documentation, including income statements, balance sheets, payroll data, depreciation schedules, and receipts for deductible expenses.
Step 2: Determine Income
Add gross receipts from sales and services, subtract returns and allowances, and calculate cost of goods sold. Include other income such as dividends, interest, or capital gains.
Step 3: Apply Deductions
List all ordinary and necessary business expenses, including salaries, rent, taxes, depreciation, and advertising. Ensure all deductions are correctly categorized.
Step 4: Complete Required Schedules
Attach the following schedules as needed:
- Schedule C for dividends and deductions
- Schedule D for capital gains and losses
- Schedule J for tax computation and credits
- Schedule K for business information
- Schedules L, M-1, or M-3 for financial reconciliation
Step 5: Determine Tax and Credits
Apply corporate tax rates ranging from 15% to 35%, and subtract available credits, such as foreign tax credits or business credits.
Step 6: Sign and File
An authorized corporate officer must sign the return. Attach all required forms and file electronically or by mail to the correct IRS service center.
Common Mistakes and How to Avoid Them
Corporations often make preventable errors when filing Form 1120. The most frequent include:
- Missing the filing deadline: Late filing triggers automatic penalties; however, submitting Form 7004 early can help secure an extension and avoid these penalties.
- Failing to make estimated payments: Missing quarterly estimated payments results in underpayment penalties; corporations should use Form 1120-W to calculate accurate amounts.
- Omitting required schedules: Missing attachments, such as Form 1125-A or Schedule D, can cause delays in IRS processing. Reviewing the form instructions ensures completeness.
- Inaccurate book-to-tax reconciliation: Corporations must ensure that Schedule M-1 or M-3 aligns with their financial statements to prevent discrepancies and reduce the likelihood of IRS scrutiny.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
The IRS reviews every return for accuracy and completeness.
- Electronic returns are typically processed within three weeks.
- Paper returns can take six to eight weeks.
- Refunds are issued within 8–12 weeks for e-filed returns.
- IRS notices may be sent for discrepancies or missing information after you file.
- Audits may occur 12–24 months after filing, especially for large deductions or reported losses.
Corporations should keep all tax records for at least three years from the filing date, or longer in cases involving income underreporting. Maintaining seven years of records is a best practice.
FAQs
What is IRS Form 1120 (2013) used for?
IRS Form 1120 (2013) is the U.S. corporation income tax return that domestic corporations file to report total income, deductions, and tax liability. It applies to C corporations and covers taxable income for the 2013 tax year.
Who must file Form 1120?
All domestic corporations, including newly formed and inactive entities, must file Form 1120 each tax year. A corporation’s principal business, gross receipts, and total assets determine filing details, even if the company reports no net income.
How does a corporation calculate taxable income on Form 1120?
Corporations calculate taxable income by subtracting deductible expenses, bad debts, and cost of goods sold from gross profit and total revenue. This process utilizes figures from the corporation’s financial statements and balance sheets to ensure accuracy.
What is the due date for a corporate income tax return?
The corporation income tax return is generally due on the 15th day of the fourth month after the close of the fiscal year. If the due date falls on a legal holiday or weekend, it is moved to the next business day.
What deductions and credits can reduce a corporation’s tax liability?
Corporations can reduce their income tax liability through deductible expenses, employment credits, and specific business income tax credits. Examples include depreciation, charitable contributions, and qualified opportunity fund investments, which are listed on Schedule D and related forms.
How does a corporation amend or correct a prior return?
If a corporation discovers an error in its corporate tax return, it must file Form 1120-X. This amended income tax return adjusts items such as capital gains, deductions, or total income reported for tax purposes.
