This guide is written for Australian businesses, foreign investors, and multinational groups that own a US corporation. Form 1120 is a US federal filing. It sits separate from your Australian tax and corporate reporting obligations.
One caution up front. As of November 2026, the latest final IRS instructions are for tax year 2025. Check every 2027 form, threshold, deadline, and penalty figure against the final IRS instructions and notices before you file.
Key Takeaways
- Domestic C corporations and LLCs that elected corporate status generally file Form 1120.
- Prepare the return from reconciled books, prior-year filings, and ownership records.
- Schedule K, Form 5472, and other attachments add duties for Australian-owned US corporations.
- Form 7004 extends time to file, not time to pay.
What Is Form 1120 and Who Must File in 2027?
Form 1120 reports a corporation's income, gains, losses, deductions, and credits, then calculates income tax, payments, and any balance due or overpayment.
Who files
Unless exempt under section 501, IRS instructions say domestic corporations generally file an income tax return whether or not they have taxable income. That includes corporations in bankruptcy. Others that file:
- Entities that elected corporate classification on Form 8832, including LLCs
- Farming corporations (other than subchapter T cooperatives)
- Foreign-owned US disregarded entities, which file a pro forma Form 1120 with Form 5472 attached
Form 1120 vs Form 1120-S vs Form 1065
| Return | Who uses it |
|---|---|
| Form 1120 | Domestic C corporations and entities electing corporate treatment |
| Form 1120-S | S corporations, after a Form 2553 election |
| Form 1065 | Partnerships, including multi-member LLCs by default |
A single-member LLC is disregarded by default. Before preparing anything, confirm the entity's election documents and its IRS classification.
How to Complete Form 1120 Step by Step
Prepare the records and confirm the filing profile
Gather these before you start:
- Prior-year return and tax elections
- Trial balance, profit and loss statement, and balance sheet
- Payroll records, fixed-asset register, and loan statements
- Shareholder records and intercompany transaction details
Then check the legal name, EIN, address, incorporation date, tax year, accounting method, and principal business activity. Note whether the return is initial, amended, final, or a short-period return. A name and EIN mismatch is a common e-file rejection.
Complete the income section
On the 2025 form, income runs through these lines:
- Lines 1a-1b: gross receipts and returns/allowances
- Line 2: cost of goods sold
- Lines 4-7: dividends, interest, rents, royalties
- Line 8: capital gain net income (Schedule D)
- Line 9: Form 4797 gain or loss
- Line 10: other income
If you have inventory, complete Form 1125-A for line 2. Purchases, labour, and ending inventory must reconcile to the books. US GAAP permits FIFO, LIFO, and weighted average inventory methods, so confirm which one the corporation uses.
Report deductions and calculate taxable income
Common deductions include:
- Compensation and salaries
- Rent, taxes, and interest
- Depreciation and employee benefits
- Advertising, charitable contributions, and bad debts
Limits and substantiation rules can change, so verify them against the 2027 instructions.
Supporting forms feed these lines:
- Form 4562 for depreciation (line 20)
- Form 1125-E for officer compensation when total receipts are US$500,000 or more
- Schedule D and Form 4797 for asset sales
Complete tax, credits, payments, and balance due
Taxable income flows into Schedule J. Under 2025 law, the rate is 21% under IRC section 11(b). Treat that as a prior-year reference, not a confirmed 2027 figure.
Credits depend on facts. Form 1118 covers foreign tax credits and Form 3800 covers general business credits. Estimated payments and other payments reduce the balance. The instructions also cover corporate alternative minimum tax, base erosion minimum tax, and personal holding company tax.
Review signatures, attachments, and submission
An authorised officer must sign. Eligible officers include:
- President or vice president
- Treasurer or assistant treasurer
- Chief accounting officer
- Another officer with proper authority
For e-filing, the corporate authorisation is Form 8879-CORP, which the electronic return originator (ERO) must receive before transmitting.
Final check: confirm every schedule, election statement, payment confirmation, and foreign-owner form is attached.
Form 1120 Schedules and Required Attachments
Core schedules
| Schedule | Purpose |
|---|---|
| C | Dividends, inclusions, special deductions |
| J | Tax computation and payment |
| K | Other information |
| L | Balance sheets per books |
| M-1 | Book-to-tax reconciliation |
| M-2 | Unappropriated retained earnings |
Schedules L, M-1, and M-2 may be omitted only when both total receipts and year-end total assets are under US$250,000 (2025 figures). Schedule M-3 generally applies at US$10 million or more in year-end assets, so verify the 2027 thresholds.
Schedule K and foreign-owner reporting
Schedule K is the "Other Information" schedule. It is not a Schedule K-1, which partnerships and S corporations issue to allocate income to owners.
Its questions cover ownership of foreign corporations and partnership interests at the 20% and 50% levels, accounting method, and whether a foreign person owns at least 25% of voting power or value. That last question matters most to Australian owners.
Form 5472 applies to a 25%-foreign-owned US corporation with a reportable transaction with a related party. Attach one per related party by the return due date, including extensions. The Form 5472 instructions set an initial penalty of US$25,000, plus US$25,000 for each 30-day period after notice and 90 days of continued failure.
A foreign-owned disregarded entity cannot e-file Form 5472. It files by fax or mail.
Operational attachments
- Inventory: Form 1125-A
- Officer pay: Form 1125-E
- Depreciation: Form 4562
- Capital sales: Schedule D; business property: Form 4797
- Foreign activity: Forms 5471, 8858, or 8865, only if a filing category is met
Do not attach a schedule just because it appeared last year. Facts, transactions, ownership, and elections drive the list.
Controlled groups
Controlled-group members complete Schedule O to report the consent plan and apportionment of tax benefits. Confirm any conditional schedule against the final 2027 instructions.
Form 1120 Due Dates, Extensions, Payments, and Penalties
Original filing deadline
Under the 2025 instructions, Form 1120 is generally due on the 15th day of the 4th month after year-end. The IRS chart lists the 2026 calendar-year return as due 15 April 2027. Weekend and holiday dates move to the next business day.
A June 30 year-end was due in the 3rd month under the 2025 instructions. Draft Publication 509 (2027) states a 4th-month date, but it is a draft, so confirm before relying on it.
Extensions
File Form 7004 by the original due date. For tax years beginning in 2026, the automatic extension is 6 months. It extends time to file only. Estimate your liability and pay by the original deadline.
Estimated tax and e-filing
- Estimated payments are generally required when expected tax is US$500 or more.
- Installments fall on the 15th day of the 4th, 6th, 9th, and 12th months.
- Payments are electronic, through EFTPS or the IRS business tax account.
- Form 2220 computes any underpayment penalty. Form 1120-W is historical.
- Under 26 CFR 301.6011-5, a corporation filing at least 10 returns of any type in a calendar year must e-file.
Penalties and interest
| Item | Rule |
|---|---|
| Failure to file | 5% of unpaid tax per month, up to 25%; minimum when over 60 days late is the lesser of US$525 or 100% of the tax |
| Failure to pay | 0.5% per month |
| Estimated-tax underpayment | Computed on Form 2220 |
| Interest | 7% general, 9% large corporation (Q4 2026); compounds daily |
| Form 5472 | US$25,000 initial |
Reasonable cause can relieve the failure-to-file penalty. The IRS failure-to-file page covers the details. The IRS generally cannot waive the estimated-tax penalty for reasonable cause. Confirm final 2027 penalty and interest amounts in the IRS publications when they are released.
Final Review Checklist and Common Filing Mistakes
Before submitting, confirm:
- Entity classification matches IRS records
- Legal name, EIN, and tax year are correct
- Income and deductions tie to reconciled books
- Schedule L balances and Schedule M-1 reconciles
- Payments and balance due are confirmed
- Authorised signature is in place
- All schedules and foreign-owner forms are attached
- Proof of filing is retained
Frequent errors:
- Filing Form 1120 when IRS records show Form 1120-S or 1120-L
- Skipping the return because there was no income
- Failing to reconcile book and tax figures
- Missing Form 5472
- Using an outdated form revision
- Assuming an extension postpones payment
How VJM Global Can Help
VJM Global is a chartered accountant firm that supports Australian and international businesses with bookkeeping, tax compliance, and accounting outsourcing. Its team of 100+ professionals has served 250+ Australian businesses and works with multinational corporations on tax matters, including income tax accounting and data collection for tax filings.
If your US corporation faces any of the situations below, ask for a professional review before you file:
- Foreign ownership
- Intercompany transactions
- Multiple entities
- A new tax election
- A reorganisation
- Incomplete accounting records
Frequently Asked Questions
Does Form 1120 have a Schedule K?
Yes. Schedule K covers "Other Information" questions, including foreign ownership. It is not Schedule K-1, which partnerships and S corporations use to report each owner's share of income.
What is the penalty for filing the 1120 tax return late?
Late filing is 5% of unpaid tax per month, up to 25%, with a minimum after 60 days. Late payment, interest, and Form 5472 penalties are separate. Confirm 2027 amounts in the current IRS instructions.
Is an LLC a 1120 or 1065?
It depends on classification. An LLC that elected corporate status on Form 8832 files Form 1120. A multi-member LLC defaults to partnership treatment and files Form 1065.
Who is required to file Form 1120 in 2027?
Generally all domestic corporations except those exempt under section 501, plus entities electing corporate classification. Check the final 2027 instructions for special categories.
When is Form 1120 due for a calendar-year corporation?
The 2026 calendar-year return is due 15 April 2027. Weekend and holiday rules apply, and Form 7004 extends filing only. Verify dates with the IRS.
Can an Australian-owned US corporation file Form 1120 electronically?
Generally yes, through the permitted e-file method. Foreign ownership may also require Form 5472, which attaches to an e-filed return. Foreign-owned disregarded entities must file by fax or mail.
