Understanding Filing Form 1120, Form 1120-S, and Key IRS Business Tax Deadlines

Every year, your business taxes come due. But unlike individual income tax returns, business tax deadlines may vary based on the type of business you own. And the complexity of the U.S. tax code certainly doesn’t help.

Our guide discusses filing Form 1120-S, Form 1120, Form 3921, and Form 7004 for S-corporations and C-corporations. We will also provide tips on avoiding penalties by adhering to tax deadlines for privately held companies.

IRS Form 1120-S: Deadline and Requirements for S-Corporations

S corporations must utilize Form 1120-S to report their net income or loss for any tax year. You’ll disclose income, losses, deductions, gains, and tax credits. Then, the IRS will calculate any taxes you owe based on your submitted numbers. You need to consider not only your income but also the income of shareholders.

When meeting the business tax deadline for Form 1120-S, timing is of the essence once Jan. 1 hits. The form is due by the 15th day of the third month after the closure of the corporation's fiscal year. In most cases, this deadline translates to March 15. Non-compliance with this deadline has severe repercussions. The IRS may levy a penalty of $200 per shareholder for every month the return is delayed for up to a year.

IRS Form 1120: Deadlines and Requirements for C-Corporations

C-corporations, where the owners and shareholders are taxed separately from the business, have a tax deadline of April 15. In addition to Form 1120 or 1120-S, you may need to file other forms when you submit your return to the IRS.

Forms you’ll need to file may relate to your employees, business expenses, shareholders, and products you sell.

Be prepared to have numbers for:

• Form 940, 941, or 943 (related to employees)
• 1099-MISC (contractor and non-cash compensation)
• Form 1125-A (cost of goods sold)
• Form 4797 (net gain or loss)
• Form 1125-E (compensation of officers)
• Form 4562 (certain types of depreciation)
• Schedules B, D, K, L, M-1, and M-2 (addenda to form 1120-S and 1120)

You’ll also need to file these forms electronically with the IRS, either through your chosen tax software or via a tax preparer doing it for you.

Form 3921: Exercise of an Incentive Stock Option

When an employee or an independent contractor exercises an incentive stock option (ISO), the corporation must report it using Form 3921. An ISO is a special stock option that can offer specific tax benefits to the recipient, making it an attractive form of compensation.

Corporations must be mindful of the particular business tax deadline for Form 3921. Your company must file Form 3921 by April 1 when filing electronically, which most S-corporations do.

Form 1099-MISC: Contractor or Non-Cash Income

Your business must file Form 1099-MISC with the IRS by March 31, 2024, when filing electronically. Sending a copy of 1099-MISC to those contractors or employees must happen by the end of January so they can file their taxes accordingly. But your actual deadline is after that.

You’ll need to file a 1099-MISC for every person to whom you paid at least $10 in royalties. You will need a 1099-MISC form for every person you paid $600 or in:

• Rent
• Prizes and awards
• Other income payments (such as payment for services rendered)
• Medical and health care payments
• Crop insurance proceeds
• Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish
• Generally, the cash paid from a notional principal contract to an individual, partnership, or estate
• Payments to an attorney
• Any fishing boat proceeds

Form 7004: Application for Automatic Extension of Time

Form 7004 serves as a lifeline for businesses that require additional time to prepare their tax returns. This application allows companies to secure an automatic extension of time to file certain business income tax, information, and other returns. Please note the extension applies only to filing the returns and not the payment of any taxes due.

Primarily, Form 7004 provides a six-month extension for filing Form 1120-S, among other forms. This additional time can be instrumental in ensuring the accurate completion of tax documents. Regarding the business tax deadline for Form 7004, it aligns with the original due date of the return for which the extension is sought. This extension allows S-corporations to file their taxes by September 15. If you need to file an extension for a C-corporation, you have until October 15.

The Consequences of Missing Business Tax Deadlines

When dealing with the IRS, promptness and precision are of the essence. Neglecting to file business tax forms on time can lead to serious repercussions. The IRS is known for being stringent about its deadlines, and if you miss them, you may be slapped with hefty penalties.

For example, the IRS imposes a $220 fine per shareholder each month that Form 1120-S is late, up to 12 months on returns where no tax is due. The penalty increases to $220 per shareholder per month, as noted above, plus 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax.

S-corporations and C-corporations can also face fines for not getting tax forms to employees or contractors on time.

Bear in mind that penalties and fines aren't the only consequences of missing the business tax deadline. The IRS also charges interest on any unpaid tax from the due date of the return until the date of payment. The interest rate is determined quarterly and can increase the amount you owe substantially over time.

Thus, it becomes critical for businesses to adhere to the tax deadlines to avoid these repercussions. To stay in compliance, companies must have a comprehensive understanding of their tax obligations, file the necessary forms on time, and ensure that all information provided is accurate. This not only helps maintain a favorable standing with the IRS but also safeguards the financial health of the business.

Tips for Staying on Top of Business Tax Deadlines

Ensuring that you adhere to all business tax deadlines is essential to avoid penalties and keep your corporation's status in good standing.

The easiest way to do this is to have financial or accounting software that organizes all of your information in an easy-to-find way. For example, invest in a software suite that classifies your payments as sales or expenses. Robust versions of accounting software will classify your expenses and sales for you, such as when you buy a piece of equipment that could be a depreciable asset that loses value over time.

Be mindful of IRS deadlines. As soon as your fiscal year ends, think about how you’ll need to organize and send information to the IRS. One thing to streamline this process is to have financial or accounting software that easily integrates with tax-filing software if you file taxes on your own.

Contact The Whitlock Co. for Business Tax Help

One final tip is to engage the services of a tax professional, like what we do at The Whitlock Co. for privately held companies. The complexities of tax laws and IRS forms can be overwhelming, even when the forms are filed electronically. Working with an expert at our firm can ease the process, providing clarity on your tax responsibilities and ensuring that you meet all requisite deadlines. We’ll also provide guidance on the intricacies of forms like 1120, 1120-S, 3921, and 7004 and their respective deadlines.

Contact the business advisors and accountants at The Whitlock Co. to request a consultation. We’ll help you get your tax filings in order so you can stay on top of IRS deadlines while filing accurate returns with the tax agency.