Month: June 2024

What Is IRS Form 1120?

IRS Form 1120 is used by corporations to file their taxes. Specifically, to report their income, deductions, losses and gains, and credits. 

If you’re any type of U.S. corporation, Form 1120 (or some version of it) is the official IRS form you’d use to report your taxes. 

What is the difference between Form 1120 and 1120-S?

While Form 1120 is used by C corporations, Form 1120-S is specifically used by S corporations.

Before filing your taxes, make sure you have the correct version of Form 1120 for your corporation. 

Who Needs to File IRS Form 1120?

All corporations (unless exempt under Section 501), are required to file their tax returns using Form 1120. 

LLCs, however, don’t generally use Form 1120. 

Multi-member LLCs are typically treated as partnerships and must file Form 1065. 

Single-owner LLCs aren’t treated as a separate entity and report their income and deductions on their owner’s tax return. 

How to File IRS Form 1120: Step-by-Step Instructions

Form 1120 is one of the more complex IRS forms given it’s designed for corporate taxes.

However, there’s a good chance that much of it doesn’t apply to your business, so don’t be overwhelmed. 

It’s highly recommended to use a tax professional or at least software online to file your corporate taxes.

Not only to make sure that they’re accurate, but also just to get a little help (filling this out on your own can be time-consuming). 

With that said, let’s break down each section step-by-step:

1. Fill in your personal information

Straightforward, fill in your basic information including name, address, EIN, date incorporated, etc:

2. Fill in your income

Next, fill in your income breakdown: 

Make sure to add up the total on line 11 after adding all your information in. 

3. List out your deductions

Next, list out all of your deduction totals:

Again here, add up the total amount on line 27 as well. 

4. Credits and payments

Now, you’ll input all relevant credits or payments:

5. Sign and date

Finally, sign and date at the bottom:

Make sure to leave the section labeled, “Pair Preparer Use Only” blank as that is reserved only for when you pay a tax professional to prepare your tax return for you. 

Check out our guide on small business tax tips for additional tax filing tips.

Do I Need to Fill Out Schedule (C, J, K, L, M-1, M-2)?

Form 1120 has several additional sections included, those being schedules:

• C
• J
• K
• L
• M-1
• And M-2

Here’s how to know if you need to fill out one or more of these IRS Schedules: 

Schedule C

If you’re a solo business owner, there’s a chance you may have to fill out Schedule C.

Schedule C is designed for reporting earnings for individual business (usually sole proprietor) earnings. 

Learn more about Schedule C. 

Schedule J

Schedule J is designed for business owners who make a majority of their income through farming or fishing. 

Learn more about Schedule J. 

Schedule K

Schedule K is designed to report individual earnings or partnership income. If you’re in any kind of partnership, you may need to fill out Schedule K. 

Learn more about Schedule K.

Schedule L

If you’re a C corporation with total assets that exceed $10 million, you must file Schedule L along with your Form 1120. 

Learn more about Schedule L. 

Schedule M-1 and M-2

If your corporation’s gross receipts (or total assets) are greater than $250,000 at the end of the tax year then you typically need to complete Schedule M-1 (and possibly M-2) when filing.

Learn more about Schedule M-1. 

What Is the Deadline for Filing Form 1120?

Form 1120 is due on the 15th day of the 4th month after the end of the corporation’s tax year.

If your corporation uses a fiscal tax year ending June 30th, you’d file by the 15th day of the 3rd month after the end of your tax year. 

Can You File Electronically?

Yes, Form 1120 can be filed online or through mail.

However, make sure to check first to see if the software you’d like to use is authorized to e-file Form 1120 first. 

See this document for the approved list of software providers for e-filing: Publication 4163 (Rev. 12-2023). 

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What Is IRS Form 9465?

IRS Form 9465 is used for requesting and implementing an installment agreement on tax payments.

Typically, Form 9465 is used when someone files their taxes but finds that they owe more than they can immediately pay.

 In that case, you can file Form 9465 and begin making installment payments on your taxes due.

However, keep in mind that even if you have Form 9465 in place with the IRS, they’ll still charge you late penalties and interest on those payments.

Who Should (and Shouldn’t) File Form 9465?

If you’ve just filed your taxes and the amount you owe is more than you can pay, you should file Form 9465. 

With that said, not everyone can file for an installment agreement with the IRS. There are several situations outlined by the IRS that will keep them from approving your request for an installment agreement.

Assuming don’t owe more than $10,000 in taxes, you as the taxpayer must meet these requirements to be automatically approved for an installment agreement:

• Must have filed all necessary previous tax returns
• You haven’t entered into a previous installment agreement within the past 5 years
• You can pay the entirety of your back taxes within 3 years

What Are My Payment Plan Options?

According to the IRS, they offer two payment plans depending on your balance:

• Long-term (i.e. an installment agreement): If you owe $50,000 or less in combined tax, penalties, and interest.
• Short-term payment plan: If you owe less than $100,000 in combined tax, penalties, and interest.

You must fit one of these qualifications to set up a payment plan using Form 9465 with the IRS. 

How to Fill Out Form 9465

Now, let’s talk about how to fill out Form 9465.

It’s a short form but has lots to potentially check off and fill in, so it can be a little intimidating.

Fortunately, it’s an easy form to complete and doesn’t take long. 

You have two options for completing Form 9465 and requesting an installment agreement:

e-File online

By far the easiest and fastest way to complete Form 9465, most major tax preparation software such as TurboTax is authorized to complete Form 9465 for you. 

Unless you have a preference for physically mailing it in, this should be the method you choose as it will get you a response faster.

Fill out and send through mail

Filling out and mailing Form 9465 is an option as well. Start by downloading and printing Form 9465 here: Form 9465. 

Start by filling out your basic information:

Form 9465 is separated into just two major sections, but each has quite a bit of questions.

However, in Part I, the questions are for the most part easy and straightforward:

Once Part I is complete, it’s simply on to Part II to finish up the form:

Again, quite a few basic questions so not much difficulty:

Finally, don’t forget to sign and date it (located at the bottom of page one) and you’re all done!

If any section of Form 9465 is confusing, you can find out more information about how to fill out IRS Form 9465 directly from the IRS here: Instructions for Form 9465. 

Can You File Form 9465 Electronically?

Yes, you can file Form 9465 electronically through most major tax software.

However, you can only file electronically if the amount you owe is less than $50,000.

How to Set Up a Payment Plan with the IRS

To set up an installment plan with the IRS, use their Online Payment Agreement tool to sign up online and apply. 

You’ll need to create an ID.me account before logging into the platform, but once you’re in, simply follow the prompts and you can get everything done conveniently online:

How Much Will I Pay the IRS In Interest and Penalties?

When paying overdue taxes, interest and penalties typically cost:

• Penalties: .5% per month, not exceeding 25% of unpaid taxes
• Interest: Currently 8% per year (See latest IRS notice here)

Keep in mind that interest rates are subject to change, so the amount listed here may not be the current interest rate you’ll pay via your installment agreement.

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What Is Form 941?

IRS Form 941, Employer’s Quarterly Federal Tax Return, is used by employers to report income and payroll tax withholdings, Social Security, and Medicare tax burden. 

The complete list of items reported on Form 941 includes:

• Employee wages, including tips and other compensation
• Federal income tax withholdings (payroll)
• Medicare tax withholdings (employee and employer shares)
• Social Security benefits withholdings 
• Quarterly SS and Medicare tax adjustments for various reasons such as sick pay

While that is a lot of information, simply know that Form 941 will tell you what your overall payroll tax responsibility is for that quarter.

Who Needs to File IRS Form 941?

If you’re reading this, chances are you either already know you have to fill out Form 941 (in which case, feel free to skip to the next section) or you’re not sure yet.

So, let’s talk for a sec about who needs to fill out form 941.

Most businesses with employees must file Form 941 each quarter, with some exceptions typically in the form of the type of employee you employee:

• Business that employ maids and nannies
• Businesses that employee strictly farmworkers
• And seasonal businesses are only required to file during quarters in which they weren’t operational (i.e. they had no employees)

Each state and business type is different, however, and the list of who does and doesn’t need to fill out Form 941 is beyond the scope of this guide.

Make sure to check the IRS’s official page on Form 941 to verify if you need to fill it out or not: About Form 941, Employer’s Quarterly Federal Tax Return.

How to File IRS Form 941: Step-by-Step Instructions

IRS Form 941 is relatively simple and straightforward.

We suggest filing Form 941 through a tax preparation software, which will semi-automate the process for you and cut down on time.

However, if you need to manually fill out Form 941, here are step-by-step instructions:

*Note: Keep in mind, Form 941 comes with a payment voucher, which you’ll use if you’re required to submit payment with Form 941. 

1. Fill in your business information

First, start by filling out your basic business information at the top of the form:

Also, make sure to check off which quarter you’re reporting for to the right of that box here:

2. Complete Part 1: Wages and withholdings

Next, part one requires you to fill in an assortment of information related to wages and payroll tax for that quarter:

This is where you’ll note down your own numbers including SS payments, medicare withholdings, and payroll withholdings.

Keep in mind that line 5e is the total you get from adding 5a – 5d (SS wages and tips + Medicare wages and tips).

3. Complete Part 2: Deposit scheduling

The next section is quick and easy with straightforward instructions. You’ll simply note down at what frequency you deposit based on your payroll:

Note that if you’re a semi-weekly depositor, you’ll need to also fill out Schedule B of Form 941 and send it with Form 941. 

4. Complete Part 3 + 4

Parts three and four are, fortunately, short and to the point.

First, you’ll fill out whichever of the two questions in part three apply to you (if none, you can leave the section blank):

Part four is only relevant if you’re working with a CPA or other tax preparation specialist and you’re authorizing them to speak on your behalf with regards to your business return and Form 941.

5. Sign and date

Finally, finish by signing and dating at the bottom:

The section below your signature will only be used if you paid a tax preparer or CPA to complete Form 941 on your behalf, in which case they would sign here.

What Is the Deadline for Filing Form 941?

IRS deadlines for filing Form 941 is typically one month after the final day of the reporting window. 

That makes the reporting day for each quarter:

• Q1 (Jan, Feb, Mar): April 30th
• Q2 (Apr, May, June): July 31st
• Q3 (July, Aug, Sept): Oct 31st
• Q4 (Oct, Nov, Dec): Jan 31st

Keep in mind that you can obtain additional time if you’ve paid your employment tax deposits in full for that quarter. The IRS allows an additional 10 days to file, which would be added on top of the deadlines listed above. 

Can You File Electronically?

Yes, Form 941 can be filed electronically or by mail. 

See this IRS article for more information on which software is authorized to e-file Form 941.

Where to File Form 941

If you’re required to, or simply prefer, physically mailing Form 941, that’s an option as well.

Here’s a chart that shows exactly what address you should send Form 941 depending on what state you’re located in:

Important: If you do not have a principal place of business in any state, or a legal residence, you’ll need to mail Form 941 to one of the addresses below. 

For returns without payments included, send Form 941 to:

Internal Revenue Service

PO Box 409101

Ogden, UT 84409

For returns with payments included, send Form 941 to:

Internal Revenue Service

P.O. Box 932100

Louisville, KY 40293-2100

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