Can You File Form 1120 and Schedule F for the Same Business?

Someone reviewing a potential client’s business return noticed both a Form 1120 (corporation) and a Schedule F (farm income) for the same business and same tax year, with the same gross income on both. They asked whether you can file both and whether that leads to overstated income. You cannot. A single business should report its income on one form only: either Form 1120 if it’s a corporation, or Schedule F on the owner’s 1040 if it’s a farm sole proprietorship. Filing both for the same business and same numbers means the income is reported twice and can trigger IRS scrutiny and penalties.

Bottom line: No. A business should not file both Form 1120 and Schedule F for the same business in the same tax year. Form 1120 is for corporations; Schedule F is for sole proprietors reporting farm income. Using both for the same activity with the same numbers double-reports income, overstates tax, and can attract IRS scrutiny. Clarify with the client whether the activity is a corporation (1120 only) or a sole-proprietor farm (Schedule F only), then use only the correct form and consider amending prior years if both were filed.

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Question from Reddit

Business Has an 1120 and a Schedule F?

I'm reviewing the financials for a potential client at my (non-tax/accounting related) job. For their business return, they provided a 2023 1120 and in the same file, a 2023 1040 Schedule F for the same business with the same numbers as on the 1120. This seemed weird to me, but I'm not sure what exactly is wrong with this situation to try and seek clarification, if that makes sense? Can you have an 1120 and Schedule F for the same business, with the same gross income reported? Is that not going to lead to overstating income or something?

Source: Reddit

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Analysis

To determine whether a business can file both Form 1120 and Schedule F for the same tax year, we need to understand the purposes of each form:

• Form 1120 is used by corporations to report their income, gains, losses, deductions, and credits.
• Schedule F is used by sole proprietors to report farm income and expenses.

A business structured as a corporation would not also file Schedule F, because that form is for a different type of entity. If both forms report the same income, that can result in double-reporting and overstated income, which can lead to IRS scrutiny and penalties.

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Answer

No. A business should not file both Form 1120 and Schedule F for the same business in the same tax year. Doing so can lead to the same income being reported twice, once on the corporate return (1120) and once on the individual return (Schedule F on the 1040), which overstates income and tax liability and can attract IRS scrutiny.

What’s going on

• Form 1120 is for C corporations (and certain other entities filing as corporations). The corporation reports its income and expenses on the 1120; it does not report that same income on the owner’s personal return as farm income.
• Schedule F is for sole proprietors (individuals) who have farm income and expenses. It is attached to the individual’s Form 1040.
• If the same business is a corporation, its income belongs on the 1120 only. If it’s a sole proprietorship (farm), the income belongs on Schedule F only. Using both for the same business and same numbers means the income is effectively reported twice.

What to do

1. Clarify the business structure with the client: Is the farm/activity operated as a corporation (then only 1120) or as a sole proprietorship (then only Schedule F)?
2. If it’s a corporation, the client should only have filed Form 1120; the Schedule F with the same numbers would be incorrect and should be removed or amended.
3. If it’s a sole proprietorship, they should only have filed Schedule F (on the 1040); a Form 1120 for the same business and same numbers would be incorrect.
4. Recommend that the client consult a tax professional to correct any prior-year returns where both were filed, and to ensure future filings use only the correct form. For organizing entity structure and what was filed where, Margen can help you or the client track entities and avoid double-reporting.

Related: Single-Member LLC Passthrough and Schedule C · C-Corp Employee Health Premiums · Entity Classification Election Mistake (LLC vs C-Corp) · Nurse Practitioner Entity Choice: LLC, S-Corp, or C-Corp

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Applicable Sections

Federal / IRS

• Form 1120: Used exclusively for corporations to report income, gains, losses, deductions, and credits. Corporations do not file Schedule F (IRS Publication 541).
• Schedule F (Form 1040): Used only by sole proprietors to report farm income and expenses. A corporation should not file this form for the same business.

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Practical Notes

• If the business is a corporation, it should file only Form 1120 for that entity. If it is a sole proprietorship (farm), it should file only Schedule F on the owner’s 1040. Filing both for the same business can attract IRS scrutiny and penalties.
• Clarify the entity type with the client and confirm which form (1120 or Schedule F) is correct for their structure. Document the clarification for your files.
• If prior-year returns were filed with both forms, a tax professional can advise on whether to amend and how to explain the correction to the IRS.
• Margen can help you or the client keep entity structure and filings straight so the right form is used going forward.

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Limitations

This answer does not cover specific penalties or amendment procedures for incorrectly filed returns. It does not address state reporting. For guidance tailored to the client’s situation, including how to correct prior years, consult a tax professional. Margen can help you explore additional paths to minimized liabilities.