Common Questions

If you form a corporate entity for your small business, regardless of whether it's taxed as a C or S corporation, a tax return must be filed with the Internal Revenue Service on its due date each year. Corporate tax returns are always due on the 15th day of the third month following the close of the tax year. The actual day that the tax return filing deadline falls on, however, isn't the same for every corporation. For a new corporation that hasn't been in existence for a full year and will file based on a calendar year, the first return is still due on March 15 even though it will cover less than a 12-month period. This initial return, which the IRS refers to as covering a “short tax year,” is prepared the same way as full-year corporate tax returns, except it reflects the income and expenses of a shorter period.

Depends on what entity your business is. All businesses that operate as corporations have to file tax returns with the IRS regardless of whether they made money or not. Same for if they owed taxes or not, corporations still have to file tax returns.

Depends on what entity your business is. All businesses that operate as corporations have to file tax returns with the IRS regardless of whether they made money or not. Same for if they owed taxes or not, corporations still have to file tax returns.

If you file your S corporation income tax return late and no tax is due, the late filing penalty is $195 per month or for any portion of a month the return is late multiplied by the number of corporate shareholders. For example, if you have three corporate shareholders and the tax return is filed one month late, calculate the penalty by multiplying the $195 monthly penalty by the one month the return is filed late multiplied by your three shareholders. The total penalty is $585. If you file your income tax return late and the S corporation owes taxes, the IRS imposes an additional 5 percent penalty on the unpaid tax for each month or portion of a month the return remains unfiled. For example, if your S corporation’s tax is $5,000, compute the penalty by multiplying the $5,000 by 5 percent to get $250. Now add the $250 penalty to the $585 late filing penalty for a total of $835. The maximum IRS-imposed penalty is 25 percent of the unpaid tax amount. The penalty and unpaid tax are added together to help determine how much you owe the IRS.

When you fail to file a Form 1120 by the deadline, the corporation is charged a monthly penalty that's equal to 5 percent of any income tax that remains unpaid. Moreover, the corporation will reach the maximum 25 percent penalty after the fifth month that the return remains unfiled. Even if the corporation wouldn't have reported any taxable income had the return been filed, the IRS will still charge a penalty of $100 once the return is more than 60 days late. In addition to the penalties for failing to file, the IRS can charge the corporation a separate penalty for paying taxes after the filing deadline. This penalty will increase the amount of tax that the corporation owes by one-half of a percent for each month it remains unpaid. However, since the two penalties accrue at the same time, the IRS does reduce the late-filing penalty by the amount of late-payment penalties that accrue during the same initial five months.

Corporate tax returns are always due on the 15th day of the third month following the close of the tax year. The actual day that the tax return filing deadline falls on, however, isn't the same for every corporation. For corporations that adopt a calendar year -- the consecutive 12-month period of Jan. 1 through Dec. 31 -- the tax return filing deadline is always March 15. When the 15th falls on a weekend or holiday, the next business day is the deadline. If you elect to use a fiscal year instead, Form 1120 -- or Form 1120S if yours is an S corporation -- is due two months and 15 days after the close of your corporation's specific tax year. A fiscal year covers any 12-month period that ends on the last day of a month other than December.

Depends on how you chose your LLC to be taxed. By default, LLCs are taxed as pass-through entities, but you can decide to be taxed as a sole (single) member LLC (sole proprietorship) or a corporation (S or C corporation). Sole proprietorships are not required to file every year. They report their business tax information on their personal tax return. If your sole (single) member LLC received a 1099-MISC, your business should file that year to avoid any penalties.