C Corporation Tax Compliance

Form 1120

Due April 15 (calendar); 21% rate; Schedule M-3 if assets ≥ $10 million, else M-1; M-2 = retained earnings.

Taxable income items

• Dividends received deduction 50 / 65 / 100%.
• Charity: above 1% floor (2026+), up to 10% cap.
• Net operating losses (NOLs): 80% limit, forward only.
• Business interest: 30% of adjusted taxable income (before depreciation again).
• Domestic research costs expensed (Section 174A); 100% bonus depreciation.
• Capital losses only vs gains (back 3, forward 5).

Groups

Consolidated return: 80% vote and value. Controlled groups share limits.

Estimates

4th, 6th, 9th, 12th months; 100% of current or prior; large corporations: prior-year only for the first installment.

Other

Research credit (payroll offset for small businesses) · foreign tax credit · 15% minimum tax for $1 billion+ · accrual method unless small business.

Exam traps

• Accrued bonuses to employees are deductible for an accrual-basis corporation only if paid within 2½ months after year end.
• Accrued pay to a cash-basis shareholder who owns more than 50% is deductible only when actually paid.
• Federal income tax expense is added back in the book-to-tax reconciliation — it's never deductible.