Form 1120 vs 1120S

Form 1120 vs 1120S: What Are They & How Do They Differ?

Form 1120 vs 1120S

Business owners in the United States face various tax obligations, one of which is understanding and filing the correct corporate income tax return. Two of the most common IRS forms for corporations are Form 1120 and Form 1120S. But what’s the Form 1120 vs 1120s, and which one applies to your business?

This guide explains everything you need to know about Form 1120 vs Form 1120S, including filing requirements, deadlines, and key differences—according to IRS guidelines and U.S. tax laws.

1) S-Corps and C-Corps: A High-Level Overview

Before diving into the tax forms, it’s important to understand the business structures these forms relate to: C Corporations (C-Corps) and S Corporations (S-Corps).

  • C-Corporations are standard corporations that pay corporate income taxes on their earnings. Profits may be taxed twice—first at the corporate level and again when distributed to shareholders as dividends.
  • S-Corporations are pass-through entities. They do not pay federal corporate taxes. Instead, income, deductions, and credits flow through to shareholders, who report this information on their tax returns.

These structural differences dictate which form your corporation must file.

2) What Is Form 1120S?

Form 1120-S, also called the U.S. Income Tax Return for an S Corporation, is used by S-Corps to report income, losses, deductions, and credits.

Since S-Corps don’t pay corporate income taxes, Form 1120S is primarily used to report the corporation’s financials to the IRS and to allocate profits and losses to shareholders through Schedule K-1.

2.1) How To Fill Out Form 1120S

Filing Form 1120-S requires accurate and complete information across various sections. Here’s a breakdown:

2.1.1) Company Information

This includes:

  • Business name
  • Employer Identification Number (EIN)
  • Address
  • Date of incorporation
  • Business activity code

2.1.2) Fiscal Year

You must declare your tax year (calendar or fiscal). Most S-Corps use the calendar year unless they have special IRS approval to use a different fiscal year.

2.1.3) Accounting Method

Select your accounting method:

  • Cash method: Income is reported when received, expenses when paid.
  • Accrual method: Income and expenses are reported when incurred, not when paid.

2.1.4) Profit and Loss Information

You’ll report:

  • Gross receipts or sales
  • Cost of goods sold (if applicable)
  • Operating expenses
  • Net income or loss

This section is crucial for calculating the bottom-line results that will pass through to shareholders.

2.1.5) Balance Sheet Information

Part of the form requires you to include a balance sheet reflecting your company’s financial position at the beginning and end of the year. This includes:

  • Assets (cash, inventory, property)
  • Liabilities (debts)
  • Equity (retained earnings, stock)

2.1.6) Support for Tax Credits

If the S-Corp qualifies for tax credits (like the Research & Development Tax Credit), you must document and support these credits in the form or attach additional schedules.

2.1.7) Shareholder Information

Each shareholder’s ownership percentage, taxpayer identification number, and share of income or loss must be reported. This is done via Schedule K and Schedule K-1.

2.2) Where To File Form 1120-S

The mailing address depends on your state and whether you are enclosing a payment. You can find the correct address in the latest IRS Instructions for Form 1120-S.

E-filing is encouraged and often mandatory for certain corporations. Many tax professionals use IRS-approved software to file 1120-S electronically.

2.3) When Is Form 1120-S Due?

Form 1120-S is due on March 15th (for calendar-year corporations), or the 15th day of the third month after the end of your fiscal year. You can request a six-month extension using Form 7004.

3) What Is Form 1120?

Form 1120, or the U.S. Corporation Income Tax Return, is used by C Corporations to report their income, deductions, and tax liabilities to the IRS.

Unlike S-Corps, C-Corps pay corporate income tax directly to the federal government. The tax rate for C-Corps is currently a flat 21% (as of the Tax Cuts and Jobs Act of 2017).

3.1) How To Fill Out Form 1120

Filing Form 1120 requires reporting the following:

  • Company details (name, EIN, address)
  • Gross income (sales, dividends, capital gains)
  • Deductions (operating costs, employee salaries, depreciation)
  • Taxable income calculation
  • Tax computation based on IRS rates
  • Payments & credits already made
  • Balance due or refund

Additional schedules such as Schedule C (Dividends and Special Deductions) and Schedule J (Tax Computation) may be required.

3.2) Where To File Form 1120

Form 1120 can be filed by mail, but e-filing is preferred. Addresses for paper filing vary by location and whether payment is included. Visit the IRS Form 1120 page for the latest instructions and mailing addresses.

3.3) When Is Form 1120 Due?

C Corporations must file Form 1120 by the 15th day of the fourth month after the close of their tax year. For calendar-year corporations, the due date is April 15th.

Like Form 1120-S, Form 7004 can be used to request an automatic six-month extension.

4) 1120 vs. 1120-S: What Are the Differences?

Here’s a side-by-side comparison of Form 1120 vs. Form 1120-S:

Feature Form 1120 Form 1120-S
Entity Type C Corporation S Corporation
Tax Payment Corporation pays tax Shareholders pay tax (pass-through)
Tax Rate Flat 21% corporate rate Individual tax rates for shareholders
Double Taxation? Yes (corporate and dividend levels) No (income flows to personal returns)
Shareholder Limit No limit 100 shareholders max, all must be U.S. citizens
Eligible Shareholders Any entity or individual Only individuals, certain trusts, estates
Filing Schedule K-1 No Yes
Common Use Larger businesses or startups seeking capital Small to medium businesses with simple ownership

5) Filing the Right Forms Is Critical for Compliance

Choosing between Form 1120 and Form 1120-S depends on your corporate structure, ownership goals, and tax strategy. Filing the incorrect form or missing deadlines can lead to IRS penalties, interest charges, or a loss of S-Corp status.

Here are some tips to ensure compliance:

  • Confirm your corporate election (e.g., did you file Form 2553 to become an S-Corp?)
  • Keep organized financial records
  • Consult a certified tax professional or CPA
  • Stay updated with IRS changes (rules can evolve with new legislation)

Filing the right form not only helps you stay compliant but also optimizes your business’s tax position and minimizes your liabilities.

Conclusion

Whether you’re running a C-Corp or an S-Corp, understanding Form 1120 vs Form 1120S is essential for maintaining IRS compliance and making strategic business decisions.

If you’re unsure which applies to your business, consider consulting a tax advisor or accountant to determine the best corporate structure and tax filing strategy. Proper filing not only keeps your business legal—it also supports financial growth and investor confidence.