S Corp Deadline: Everything You Need to Know
The S corporation deadline for filing annual federal taxes is March 15. 3 min read
2. S Corporation Income Tax Return Deadline
3. Quarterly Income Tax Return Deadlines
4. Unemployment Tax Filing Date
5. Penalties for Filing Late
The S corporation deadline for filing annual federal taxes is March 15. A six-month extension can be obtained by filing IRS Form 7004. Any shareholders that will be obligated to pay additional tax on corporate income will need to file by April 15.
What Is an S Corporation?
An S corporation is a pass-through entity, where the profits and losses are recorded on the individual shareholder's tax returns. Each year, S corporations are responsible for filing income tax returns. Additionally, there are a variety of other IRS forms that must submitted in relation to taxes that are withheld from employee wages. Filing as an S corporation:
- Isn't actually selecting a business entity.
- Allows business owners to be taxed as a partnership or a sole proprietor.
- Does not influence how the business is run or structured.
An S corporation will still be perceived as a C corporation. Therefore, all other C corporation guidelines apply, including receiving liability protection and other C corporation paperwork.
S Corporation Income Tax Return Deadline
S corporations must file their tax returns by March 15. When submitting annual tax returns to the IRS, all activity should be completed on Form 1120S. Additionally, a Schedule K-1 needs to be attached for all shareholders. A Schedule K-1 identifies each shareholder's ownership of the business, and therefore, his or her taxable income.
S corporations can receive a six-month tax submission extension by filing Form 7004. Shareholders who are required to pay tax on corporate income must file their individual tax returns by April 15.
When an S corporation dissolves, it must file its tax return by the 15th day of the third month thereafter. Filing due dates only apply to business days. Therefore, if the 15th falls on a Saturday, a Sunday, or a legal holiday, the business may submit its tax returns on the following day.
Form 1120S must be filed if an S corporation was dissolved and reverted to a C corporation. It must be submitted following the C corporation filing guidelines. March 15, 2018 is the deadline for filing:
- 2017 Section 475 elections
- 2017 S corporation elections
- 2017 S corporation and partnership tax returns
- 2017 S corporation and partnership tax extensions.
Recently, the IRS updated the due date for partnerships. The amended due date for 2016 extensions and partnership tax returns is March 15, 2017. For 2017, the IRS has granted S corporations and partnerships the ability to file an extension. This provides six additional months for businesses to e-file, with a due date of Sep. 15, 2018.
Quarterly Income Tax Return Deadlines
S corporations that compensate employees are obligated to withhold employee social security, Medicare, and federal income taxes from their employees pay. S corporations must file Form 941 to report the total amount withheld. Form 941 must be submitted on a quarterly basis. The due dates are:
- January 31
- April 30
- July 31
- October 31.
Unemployment Tax Filing Date
S corporations should utilize Form 940 to report their annual Federal Unemployment Tax Act (FUTA) tax. Generally, an S corporation must also file Form 940 when it pays wages of $1,500 or more in any quarter or has an employee working on a daily basis for 20 or more independent weeks.
The main purpose of Form 940 is to declare the total balance due of unemployment taxes that the business owes to the IRS, based on gross employee wages. January 31 is the deadline for filing Form 940. However, the IRS does allow corporations to file as late as February 10 if the entire tax due is paid in full.
Penalties for Filing Late
The IRS will impose a fine of $195 for each month (or part of a month) that an S corporation fails to file Form 1120S by the deadline or extended deadline. The $195 fee is increased by the number of shareholders. Corporations that fail to file Form 941 by the due date and have a tax balance due may be assessed a 5 percent fee on the balance for each month or part of the month the tax is past due. A maximum penalty amount is equal to 25 percent.
Similar to Form 941, filing Form 940 late will incur much of the same penalties. S corporations and partnerships that file late will receive a penalty of $195 per owner, per month. The maximum penalty may not exceed 12 months.
Based on a reasonable cause, taxpayers may request penalty abatement. Taxpayers that ignore extension deadlines will not have their penalties reduced or removed.
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