What IRS Form 1120 (2024) Is For
IRS Form 1120 (2024) is the U.S. Corporation Income Tax Return that all domestic corporations must file each tax year to report gross income, deductions, credits, and calculate taxable income and tax liability for federal income tax purposes. It applies to active and inactive entities, including corporations in bankruptcy and certain corporations that have elected to be treated as corporations under the Internal Revenue Code.
The return determines how much income tax a corporation owes or whether it qualifies for a refund. It must include all relevant tax forms, financial statements, and supporting schedules that reflect the corporation’s income, deductions, and credits. Corporations that missed earlier deadlines should also review any unfiled 1120 C-corporation returns to avoid additional penalties or enforcement notices.
When You’d Use Form 1120 for 2024 (Late or Amended Filing)
You would file IRS Form 1120 (2024) for the current tax year if you missed the original due date or need to amend a previously filed tax return. For calendar-year corporations, the due date is generally April 15, 2025. Fiscal-year filers with a fiscal year-end of June 30 must file by September 15, 2025. The extended due date is typically the fifteenth day of the fourth month after the close of the corporation’s tax year.
Common reasons for filing late or amended returns include:
- IRS Notice Response: This occurs when a corporation files its tax return after receiving an IRS notice demanding the corporation's income tax return.
- Corrections: This applies when a business needs to adjust for discovered errors, reportable transactions, or incorrect deductions.
- Loss Claims: This happens when a corporation claims a net operating loss (NOL) carryback or adjustment through Form 1120-X.
- Changes in Accounting Method: This is necessary when a corporation updates its accounting method or corrects prior financial statement income (AFSI).
If you are unsure which schedules or supporting documents apply, the IRS Form Help Center provides guidance on the forms required for late or amended corporate filings.
Key Rules Specific to 2024
- Late filing penalty: The minimum penalty is $510 if a corporation fails to file more than 60 days after the due date without reasonable cause.
- Mandatory e-filing: Certain corporations filing 10 or more information returns in 2025 must e-file Form 1120. Paper filing is only allowed in specific situations or for foreign corporations without access to IRS e-file.
- Corporate Alternative Minimum Tax (CAMT): Interim guidance under the Inflation Reduction Act introduced the book minimum tax, which is based on adjusted financial statement income. The IRS released Notice 2024-66 to provide penalty relief for estimated tax payments related to CAMT for applicable corporations.
- Updated deductions and provisions: The dividends-received deduction worksheet has been revised to reflect the implications of Section 250. Taxpayers must accurately determine the applicable financial statement income to compute the tentative minimum tax and ensure proper reporting for regular tax.
- Foreign and consolidated groups: Corporations such as controlled foreign corporations and foreign parented multinational groups must follow specific rules when filing consolidated returns. These entities must disclose certain information and comply with provisions affecting real property interests and unrelated trade income.
Corporations facing higher penalties or CAMT-related adjustments may benefit from exploring business tax relief programs that can help manage outstanding liabilities.
Step-by-Step (High Level)
- Gather Records: Collect financial statements, accounting documents, and prior tax returns to determine net income and adjusted financial statement income.
- Use the Correct Form: File the 2024 version of Form 1120 or Form 1120-X for amended returns to ensure the tax year information is accurate.
- Attach Required Schedules: Include Schedules M-1, M-2, or M-3 for corporations with assets exceeding $10 million, as well as any related party or dividend schedules that apply to the current tax year.
- File and Pay: E-file or mail to the IRS address listed for your state, and pay any balance due electronically or by check.
- Retain Copies: Keep copies of all filed forms, financial statements, and correspondence for at least three years after the date filed or the due date, whichever is later.
If the corporation owes a balance after filing, you can apply for IRS payment plan options to spread your repayment over time.
Common Mistakes and How to Avoid Them
- Missed NOL Elections: File a timely election to waive the Net Operating Loss carryback period, as this choice is irrevocable once the return is filed.
- Incorrect Taxable Income Calculation: Apply the correct pre-2018 or post-2017 tax rules to ensure accurate taxable income and minimum tax computations.
- Schedule Oversight: Include Schedule M-3 for corporations with assets over $10 million and attach all required consolidated schedules for parent entities.
- Confusing Due Dates: Confirm the correct filing deadline for fiscal or short tax years to comply with the fourth-month rule and avoid late penalties.
- Foreign Reporting Errors: Report all required transactions with foreign entities or controlled foreign corporations to comply with international tax reporting requirements.
- Ignored CAMT Provisions: Verify adjusted financial statement income accurately when computing the Corporate Alternative Minimum Tax (CAMT) for applicable corporations.
- Missing Reasonable Cause Explanation: Attach a clear statement explaining reasonable cause when filing late to request relief from IRS penalties.
What Happens After You File
The IRS typically processes e-filed corporation income tax returns within two to three weeks and paper returns within six to eight weeks. You may receive notices requesting additional information or adjustments, especially for entities subject to corporate alternative minimum tax or reportable transactions.
If your corporation owes tax, payment plans are available through Form 9465 or the IRS online applications. Penalties and interest are imposed on unpaid taxes until the tax is paid in full. If a corporation overpays, the IRS will issue a refund through direct deposit or check.
Corporations should keep all correspondence, payment records, and acknowledgment receipts, such as the locked padlock icon confirmation, for audit and compliance purposes. The IRS generally has three years to audit a return or six years if substantial income is omitted.
FAQs
What is IRS Form 1120 (2024), and who must file it?
IRS Form 1120 (2024) is the income tax return that domestic corporations and certain corporations must file to report taxable income, deductions, and credits for federal income tax purposes. It applies to each relevant tax year and determines the total tax liability owed.
How does the corporate alternative minimum tax apply for 2024?
The corporate alternative minimum tax, created under the Inflation Reduction Act, applies to applicable corporations with adjusted financial statement income over $1 billion. It imposes a 15% book minimum tax to ensure large corporations pay a minimum tax even after using credits or deductions.
How do estimated tax payments affect my corporation's income tax return?
Estimated tax payments reduce the corporation’s tax liability when filing Form 1120. If payments equal at least 100% of the prior year’s tax, the corporation avoids penalties. Underpayments may trigger additional penalties unless the corporation shows reasonable cause.
What are the due dates for Form 1120 and related filings?
Form 1120 is due on the fifteenth day of the fourth month after the end of the tax year, usually April 15 for calendar-year corporations. Extensions are available through Form 7004, and corporations with short tax years must follow adjusted due dates.
Can a corporation file a consolidated return under Form 1120?
Yes, a consolidated return is allowed when a common parent owns at least 80% of its subsidiaries. The entire group must share the same tax year and accounting method, and file a single combined income tax return for reporting and payment purposes.
