1. Required Federal Tax Filing Forms
2. 2018 Federal Filing Dates
3. Making Required Tax Payments
4. Penalties

An S corporation, or S corp, is a “pass-through” entity, whose profits, expenses and losses, deductions, and credits are passed on to or through to the owners or individual shareholders who then report that information on their personal income tax returns.

Although they do not personally pay taxes, because the tax responsibility is passed on the owners, each S corp is required to file Form 1120S with the IRS. Form 1120S, or an Income Tax Return for an S Corp, is an informational document that gives the IRS details on the S corporation's financial activities for that year. S corporations also pay excise taxes to the IRS for specific items, activities, and services, such as indoor tanning and gas.

Required Federal Tax Filing Forms

To maintain the tax benefits associated with the classification, S corporations and their owners must file all required forms and documents with the IRS by the scheduled deadlines. In addition to form 1120S, other required forms to will be filed may include the following:

  • Schedule K-1(s), which report each owner or shareholder's individual share of the business's taxable income. Each Schedule K-1 will be compared against the S corporation's Form 1120S.  
  • Form 7004, if the S corporation is unable to file form 1120S and needs an extension. This form provides the S corp with an automatic six-month extension. The extension does not apply to the shareholders, who are subject to individual taxpayer deadline.
  • Form 941, or the quarterly payroll tax return, is filed when the S corp pays employees' wages and is responsible for withholding federal income tax, Social Security, and Medicare taxes from those wages.
  • Form 940, or the annual federal unemployment tax return, is required when the S corp pays more than $1,500 in wages to employees. The form reports the unemployment tax withheld by the S corporation

2018 Federal Filing Dates

The required tax forms must be submitted by their applicable deadline or the S corporation and its owners and shareholders may face steep penalties. The following are the 2018 deadlines:

  • Form 1120S and any applicable taxes are due on March 15th.
  • Schedule K-1s or Substitute K-1s for each shareholder or owner are due on March 15th.
  • Shareholders are responsible for filing their individual tax returns by the deadline, which is typically on or around April 15th.
  • Form 7004 and a deposit of any taxes owed must be filed by March 15th to request a six-month extension. The return and any applicable taxes are due on September 15th.
  • Form 941 is due quarterly on January 31st, April 30th, July 31st, and October 31st.
  • Form 940 is due on January 31st.

Making Required Tax Payments

Most S corporations and their owners will owe some taxes or fees and will be required to make tax payments to the IRS. The preferred method of payment is the Electronic Federal Tax Payment System (EFTPS). This system makes it easy for S corporations to make payments using electronic funds or wire transfer, and it does not have fees for using the system.

Penalties

If an S corporation or its owners fail to file the necessary tax forms by the deadlines, the business runs the risk of incurring penalties. These penalties will increase the longer the S corporation does not comply with the filing requirements. These penalties can have a devastating financial effect on the S corporation and its shareholders.

Penalties vary based on the infraction but can include any of the following:

  • Form 7004 – If the S corporation fails to file an extension, then penalties begin on the first day that the return is late or March 16th.
  • Form 1120S – If there is no tax owed and the S corporation fails to file the form, then a late filing penalty of $195 multiplied by the number of owners is charged each month the form remains unfiled. If taxes are owed, then the S corporation is fined an additional 5 percent on the unpaid taxes each month the form remains unfiled.
  • Form 941 – If the S corporation owes taxes, then a 5 percent fine, up to the maximum 25 percent, is assessed on the taxes owed each month that the form remains unfiled.
  • Form 940 – has the same penalties as Form 941.

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