If you’re a business owner, you know taxes are a part of the gig. And for S Corporations and Partnerships, the spring tax deadline is even earlier than for most (hint: it’s soon). Let’s unpack what these business entities need to know for filing by March 15.
1. Filing the correct forms
S Corporations file taxes using Form 1120S while Partnerships file Form 1065. Spouses who own an unincorporated business that is not treated as a Qualified Joint Venture also file Form 1065. File a Schedule K-1 of your designated return to report on information for each partner/shareholder, including the income, losses, deductions, and credits. This information is also reported on your separate, individual tax returns.
2. When Partnerships don’t have to file
If there was no income or expenses for the Partnership, you don’t need to submit Form 1065.
3. Avoiding the Failure to File penalty
We get it – sometimes, it can be hard to hit those tax deadlines. By filing on time by March 15, you can avoid penalties and interests later down the road. The IRS will issue a “Failure to File” penalty of $200 for each month the return is late.
4. Applying for an extension
Don’t panic if you’re not ready to file. You can submit a completed Form 7004 by March 15 to request a six-month extension of your business taxes (putting the due date at Sept. 17). Note that this will not extend your time to issue Schedule K-1s.
5. Filing electronically
Filing electronically is preferred by the IRS. In fact, Partnerships with more than 100 partners are required to e-file their forms. The same goes for S Corporations with $10 million or more in total assets or that file at least 250 returns a year.
6. Dodging an IRS audit
Just like filing individual taxes, businesses must ensure their returns are accurate to avoid audits and penalties. If you do find yourself or your business in a rut with IRS issues, a tax professional can help solve it.
7. Asking for help
If you need help preparing your return or figuring out your tax-related documentation, it’s easy to get help from a tax preparer. These professionals can help file any type of tax forms for S Corporations and Partnerships and meet quickly approaching deadlines.