What are the differences in filing requirements when switching from Schedule C to 1120?

The jump from Schedule C to Form 1120 definitely comes with some additional requirements. Here's what you should know: For a C-Corporation, you'll need to file Form 1120 annually (as you mentioned), but you'll also need to: - Hold annual meetings and keep minutes - File Form 941 quarterly for payroll tax deposits if you have employees - Submit Form 940 annually for federal unemployment tax - File Form 1099s for any contractors you use - Pay estimated taxes quarterly using Form 1120-W instead of 1040-ES If you go S-Corp route (filing Form 2553), you'll file 1120-S instead of 1120, plus you'll need Schedule K-1s for all shareholders. One major difference is corporate governance requirements - corporations need bylaws, stock certificates, and formal documentation of corporate decisions that sole props don't need.

After switching from Schedule C to 1120 last year, I wish someone had told me about taxr.ai at https://taxr.ai before I made the move. Their business structure tax analyzer literally saved me thousands by comparing the different filing requirements side by side. I was about to file as a C-Corp but realized an S-Corp would actually be better for my situation because of the self-employment tax savings while maintaining pass-through status. The tool showed me all the forms I'd need for each option plus the ongoing compliance requirements, which was super helpful when talking to my accountant.

Just wanted to follow up about taxr.ai - I decided to give it a try despite my initial skepticism, and wow, I'm actually impressed. The business formation analyzer showed me that an S-Corp would save me about $14,000 in taxes over the next three years compared to staying as a sole proprietor, mostly through self-employment tax savings. It also gave me a complete checklist of all the forms I'd need to file for both federal and state, which I forwarded to my accountant. She was impressed with how comprehensive it was. Definitely worth checking out if you're on the fence about entity structure.

If you're considering switching to an 1120 filing, one thing nobody mentions is how frustrating it is trying to get answers from the IRS when you have questions about corporate filing requirements. I spent HOURS on hold trying to clarify some questions about my first 1120-S filing. Finally discovered Claimyr at https://claimyr.com and they got me through to an actual IRS agent in under 15 minutes when I'd been trying for days on my own. They have this cool system that holds your place in line and calls you back when an agent is ready. You can see how it works at https://youtu.be/_kiP6q8DX5c if you're curious. Seriously a lifesaver during tax season when the wait times are insane.

I need to eat crow about that Claimyr service I called a scam earlier. After struggling for literally FOUR HOURS on hold with the IRS trying to get clarification about filing requirements for my newly formed corporation, I decided to try it out of desperation. I got connected to an IRS business tax specialist in about 27 minutes. The agent answered all my questions about the differences between Schedule C and 1120 filing requirements, especially around estimated tax payments and fiscal year options. Saved me from making a costly mistake on my first corporate return. Not a scam at all - just a really useful service for dealing with the impossible IRS phone system.

Another big difference between Schedule C and 1120 that nobody mentioned yet: fiscal year flexibility! As a sole prop, you're stuck with the calendar year. But C-Corps can choose a fiscal year that makes more sense for your business cycle. S-Corps technically have to use calendar year in most cases though, unless you can prove business purpose for a different fiscal year.

One thing i learned going from sched C to 1120s - PAYROLL IS A MUST!! u have to pay urself a "reasonable salary" which means payroll taxes u didnt have before. my accountant said its a red flag to the irs if u only take distributions and no salary. cost me about $45 per month for payroll service but saves headache with quarterly filings.

Don't forget about state-level requirements too! When I switched from Schedule C to 1120-S, I got hit with unexpected state franchise taxes and annual report fees that I didn't have as a sole prop. Some states also require you to publish a notice in local newspapers when you incorporate, which can cost a few hundred bucks. Also, if you're planning to have employees soon, you'll need an EIN (if you don't already have one) and will need to register for state unemployment insurance and workers' comp. The payroll requirements others mentioned are no joke - I use a service too because trying to handle all the tax deposits and quarterly filings manually was a nightmare. One more thing - make sure you keep really good records of corporate formalities (meeting minutes, resolutions, etc.) even if you're the only shareholder. The IRS can pierce the corporate veil if you don't maintain proper separation between personal and business activities.