Corporate Tax Deadline: Avoiding Penalties

The corporate tax deadline falls on March 15 and if you want to avoid the penalties and interest, you will need to have your corporate tax return in by that date.

Avoiding Penalties

Understand that as a business owner, the corporate tax deadline is one month before the federal income tax due date of April 15 for individual returns.

If you wish to avoid penalties, file your corporate tax return by the deadline, rather than filing for an extension, and pay all taxes owed by the deadline.

If an extension is the only option you have for filing the corporate return, the IRS has a form specifically for corporations – Form 7004. Filing this extension form will allow your corporation six months to complete your corporate tax return, bringing your corporate tax deadline to September 15. Just be certain to file the extension before the first deadline.

Just like an individual tax return and extension, a corporate tax extension does not exclude your corporation from paying its tax bill. Money owed is due on the original tax deadline due date regardless. Ensuring your corporate tax obligations are paid ahead of time can help you to avoid the unnecessary interest and penalties that will accrue down the road.

S Corporations

S corporations provide benefits of partnership taxation while also giving owners/shareholders limited liability protection from any creditors.

S corporations are treated differently than the standard corporation in that the S corporation does not pay income taxes. Instead, the S corporation’s income or losses are divided between the shareholders. The owner/shareholder reports the net earnings on their personal tax return.

Don’t Have the Payments

If you don’t have the money to pay your corporate taxes, the penalties and interest will apply and will need to be paid during the extension. For several businesses, this extra time is worth the cost of the penalties and interest.

Payroll Taxes

Payroll taxes apply to your employees’ taxes, known as withholding (the amount you withhold from their pay for taxes), as well as those taxes that are related to employing a worker that you as the owner must pay. These must be paid, regardless, and the IRS is stern when it comes to these taxes.