A Detailed Guide to S Corporation Tax Filing Deadlines and Procedures

What you need to know as a business owner to ensure compliance and avoid penalties

Key Filing Deadlines for S Corporations

Filing Form 1120-S: U.S. Income Tax Return for an S Corporation

S corporations must file Form 1120-S to report their income, losses, deductions, and credits. The deadline for this filing is the 15th day of the third month after the end of the tax year, which is March 15th for calendar-year corporations. This filing must include Schedule K-1 for each shareholder, detailing their share of the corporation’s income or losses.

Filing Deadline for Dissolved S Corporations

If an S corporation dissolves during the year, it must file Form 1120-S within the same time frame, i.e., the 15th day of the third month after the date of dissolution. This ensures the corporation’s final tax liabilities are reported.

What Happens if the Deadline Falls on a Weekend or Holiday?

When the filing deadline falls on a weekend or legal holiday, the deadline is extended to the next business day. This allows corporations additional time to ensure their forms are submitted on time without penalties.

Special Filing for Terminated S Corporations

If an S corporation’s status is terminated and it reverts to being a C corporation, the business must file Form 1120-S for the short period it operated as an S corporation. The deadline for this short-year filing aligns with the due date of the C corporation's tax return, including any extensions.

Requesting an Extension for Filing

How to Apply for a Filing Extension

If an S corporation cannot meet the March 15th deadline, it can file Form 7004, which grants an automatic six-month extension, extending the filing deadline to September 15th. However, it’s important to note that while the filing deadline is extended, any taxes owed must still be paid by the original March 15th deadline to avoid interest and penalties.

Changes to Form 7004

Form 7004 has undergone revisions to simplify the process of requesting extensions. Part I of the form lists all the returns eligible for extension, and filers must select the appropriate form code (e.g., for Form 1120-S). Part II of the form contains questions for all filers, ensuring that the extension request is processed correctly.

Other Key Filing Requirements for S Corporations

Quarterly Payroll Tax Filing (Form 941)

S corporations that employ workers must file Form 941, the Employer's Quarterly Federal Tax Return. This form reports federal income tax withheld from employees’ wages, as well as Social Security and Medicare taxes. The filing deadlines for Form 941 are January 31st, April 30th, July 31st, and October 31st each year. Missing these deadlines can result in penalties and interest charges.

Annual Unemployment Tax Filing (Form 940)

In addition to Form 941, S corporations with employees must file Form 940 to report Federal Unemployment Taxes (FUTA). This form is due by January 31st each year. If the corporation has paid its FUTA tax on time, the IRS allows an extension until February 10th. FUTA taxes apply if the business has paid wages of $1,500 or more in a calendar quarter or had at least one employee working at least part of a day in 20 separate weeks.

S Corporation Taxes and Reporting Pass-Through Income

S-Corporation Taxes and Pass-Through Income

One of the key benefits of S corporation status is its classification as a pass-through entity, meaning the business itself does not pay federal income taxes. Instead, the corporation’s income, deductions, and credits are reported on the individual tax returns of its shareholders. This pass-through taxation allows shareholders to avoid the double taxation typically associated with C corporations.

Schedule K-1: Reporting for Shareholders

Every shareholder in an S corporation receives a Schedule K-1, which details their share of the corporation’s income, losses, and deductions. This form is attached to the corporation’s Form 1120-S and provided to shareholders, who must include it when filing their individual tax returns.

Penalties for Late Filing

Penalties for Late Filing of Form 1120-S

If an S corporation fails to file Form 1120-S on time, it is subject to a penalty of $220 per month for each month or part of a month that the return is late. This penalty is multiplied by the number of shareholders, making it essential to file on time to avoid significant fines.

Penalties for Late Filing of Forms 941 and 940

The IRS also imposes penalties for late filing of Forms 941 and 940. For Form 941, the penalty is 5% of the unpaid tax for each month (or part of a month) that the filing is late, with a maximum penalty of 25%. Form 940 penalties follow a similar structure. Additionally, if taxes are not paid by the due date, interest charges will accumulate.

Key 2024 Tax Deadlines for S Corporations and Other Entities

Understanding and keeping track of tax deadlines is crucial for maintaining compliance. Here is a summary of key tax deadlines for 2024:

  • January 15th, 2024: Fourth Quarter 2023 Estimated Tax Payments Due
  • January 31st, 2024: Deadline to file Form W-2 and Form 1099 for employees and contractors
  • February 28th, 2024: Paper filing deadline for Form 1099-MISC
  • March 15th, 2024: Form 1120-S due for S corporations; Form 1065 due for partnerships
  • March 31st, 2024: Electronic filing deadline for Form 1099-MISC
  • April 15th, 2024: Individual and C Corporation tax returns due; First Quarter 2024 Estimated Tax Payments Due
  • June 17th, 2024: Second Quarter Estimated Tax Payments Due
  • September 16th, 2024: Third Quarter Estimated Tax Payments Due; Deadline for extended S corporation and partnership tax returns
  • October 15th, 2024: Extended deadline for individual and C corporation tax returns
  • December 31st, 2024: Final deadline for making tax moves for 2024

What to Do if You Miss a Tax Deadline

Paying Your Taxes Late

Failing to pay your taxes on time can result in penalties and interest charges. The penalty for late payment is 0.5% of the unpaid taxes per month, up to a maximum of 25% of the total tax liability. If you cannot pay the entire amount by the due date, it’s still advisable to file on time to avoid the 5% late filing penalty, which is much higher.

Seeking Professional Tax Help

Filing taxes for an S corporation can be complicated due to the multiple forms and deadlines involved. Many S corporations choose to seek professional help to ensure compliance. Wiseway Partners offers personalized tax filing assistance, ensuring that all forms are filed correctly and on time. Professional tax advisors can also help identify potential tax savings and maximize deductions, reducing the corporation's overall tax burden.