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4 Tips to Prepare for Corporate Tax Returns

An incorporated business is a separate entity, an artificial person of sorts. That means that if your business is a corporation, you need to file your personal and corporate tax returns separately. Both returns are filed in different IRS Forms. The one that applies to C corporations is Form 1120. Most of the information would be available in the financial accounts and reports while the rest is general information about the corporation.

Company Information

The form as well as the 1120 instructions can be procured from the IRS website. You will have to familiarize yourself about the different section. For example, the top of the first page is the information section asking some basic questions. If the corporation has subsidiaries, check Box A and complete Form 852 and attach supporting statements. If it is the first time that you are filing a consolidated return, you will have to complete Form 1122 as well.

Total Income

Before you move to the income section on the first page, go to page 3 and find schedule K. Here, you will have to fill in the accounting method (something that affects results of income statement). The rest of the form deals with business activity codes and additional reporting information that IRS needs.

All the information you need to fill in the income section on page 1 relates to profit and loss. The primary income of the corporation is total revenue less cost of goods sold. Fill other income totals in the lines after that and then the total income.


The next section on page 1 relates to expenses of the corporation and includes marketing, establishment and general expenses. Total income less total deductions represents taxable income. The next line displays the total tax on income thus arrived at.

The next section is regarding tax credits, tax paid and refunds. The total of these are to be deducted from the tax calculated and you have the balance. A negative figure reflects that the IRS will send you a refund.

Details of Summarized Information 

On page two is Schedule A, where you have to provide details of cost of goods and other information, the summary of which you have provided on page 1. Also, in schedule E, fill in the details of office compensation that all corporations are required to file with the IRS.

In schedule L, fill in current and previous year’s assets and liabilities. Just as in standard accounting reporting, assets are listed in order of most liquid to less liquid and liabilities in the order they are due. 



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