S-Corporation Tax Preparation & Filing
S-Corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. Along with this, S-Corporations must file IRS Tax Form 1120S. Let our tax professionals prepare your 1120S return to have peace of mind.
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S-Corporation Tax Preparation FAQs
- When are S-Corporation Income Tax Returns Due?An S corporation must always file its annual tax return by the 15th day of the third month following the end of the tax year, generally March 15. The business is responsible for reporting all financial activity on Form 1120S and attaching a Schedule K-1 for each shareholder. These Schedule K-1s report each shareholder’s share of the business’ taxable income so they can report it on their personal returns.
If the S corporation is unable to file by March 15, it can obtain an automatic six-month extension of time to file by filing IRS Form 7004. The shareholders who pay tax on the corporate income are subject to the same deadlines the IRS imposes on individual taxpayers, which in most cases is April 15 every year.
- If I can’t file by the S-Corp Filing Deadline is there a penalty?When S corporations fail to file Form 1120S by the due date or by the extended due date, the IRS will impose a minimum penalty of $195 for each month or part of the month the return is late multiplied by the number of shareholders. If the corporation files its Form 941 after the deadline and it has an unpaid tax balance, a 5 percent penalty may be assessed on the balance for each month or partial month the tax is late, up to a maximum of 25 percent. Similar penalties apply to filing Form 940 after the due date as well.
- If I have employees or payroll are there other deadlines?AIf the S corporation pays wages to employees, then the company is responsible for withholding federal income tax as well as Social Security and Medicare taxes from their paychecks. This requires the S corporation to file an IRS Form 941 each quarter to report the aggregate amount it withholds and must remit to the IRS. The form is due four times a year on January 31, April 30, July 31 and October 31. Having employees may also require the S corporation to file an annual Federal Unemployment Tax Return each year on Form 940. If the corporation pays wages of $1,500 or more in any calendar quarter or has at least one employee working at least part of a day in 20 or more separate weeks, it generally must file Form 940. The purpose of the form is to report the amount of wages the S corporation owes unemployment taxes for, which the corporation is responsible for sending to the IRS. The due date for filing Form 940 is Jan. 31 of each year. However, if the corporation pays the entire tax on time, the IRS allows it to file as late as Feb. 10.