Which form does a business use to report income?

A business reports its income using specific tax forms based on its structure and type. Form 1120 is used by corporations to report their income, gains, losses, deductions, and credits, while Form 1065 is utilized by partnerships to report their income, deductions, gains, and losses, as well as to provide each partner with the necessary information to report income on their individual returns.

Selecting both Form 1120 and Form 1065 acknowledges that different types of businesses—corporations and partnerships—each have their own designated forms for reporting income. Thus, the inclusion of both forms accurately reflects the diverse types of business entities and their reporting obligations. This highlights the importance of understanding the nature of the business entity in determining the correct form for income reporting.