Businesses: File on Time or Pay the Price

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Form 1065 with sticky note reminding not to forget the tax deadline

March 15 is the tax-filing due date for calendar year S-corporations and partnerships. While this filing deadline does not require making a tax payment, missing the due date could cost you a hefty penalty.

The Penalty

The penalty is calculated based on each partial month the tax return is late multiplied by each shareholder or partner. So a tax return filed 17 days late with no tax due could cost a married couple who jointly own a small S-corporation $800 in penalties!*

Take Action

Here are some ideas to help you avoid penalties:

File on Time

If you are a partner or shareholder of an S-corporation or partnership, file your company's tax return on or before March 15. In addition to the penalties, filing late shortens the time you have to file your individual tax return and pay the taxes due by April 15.

Consider an Extension

Depending on the degree to which a state incorporates recent federal tax changes, you could see a big tax surprise on your state tax return. As a result, the nonprofit Tax Foundation is anticipating that many taxpayers will experience an increase in state taxes for 2018.

Your Personal Tax Return May be Delayed

Do not file your Form 1040 tax return until you receive all your K-1s from each of your S-corporation and partnership business activities. Be prepared — If the business files an extension, it's possible you may need to extend your personal tax return while you wait for the K-1. This does not extend the due date for paying taxes owed.

Challenge the Penalty

While you may not be successful, it doesn't hurt to try to abate the penalty. This is especially true if you file and pay your personal taxes on time. Kindly remind the US Treasury it is still receiving the taxes owed to them in a timely manner.

If you haven't filed your S-corporation or partnership return for 2018, there's still time to get it done or file an extension. Please call if you need assistance.


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Disclaimer

The information in this article is written as accurately as possible and to best of the writer's knowledge. However, there may be omissions, errors, or mistakes. Because of this and changes in circumstances, the information in this article is subject to change. This article is for informational purposes only and should not serve as professional, financial, medical, emotional, and/or legal advice. Readers may rely on the information on this article at their own risk, but they should consult a CPA, financial expert, or other professional for advice. Givilancz & Martinez, PLLC reserves the right to change and handle this article series, and therefore, may remove or alter any part of this article or the comments section. Any comments inserted by readers are not the responsibility of G&M PLLC and do not represent the thoughts or ideas of G&M PLLC.