Avoid Very Costly Late Filing Penalties
The penalty for a corporation failing to file a tax return or a tax extension is the same as the standard penalty for individuals with regards to filing an 1120 or 1120-A. In other words, the IRS assesses a penalty of 5% for any unpaid tax for each month the tax return is late, up to a maximum of 25%. If you fail to file either a tax extension or tax return by the appropriate filing deadline (March 15th for S Corps, Multi Member LLC's and Partnerships and April 15th for C Corporations), the IRS will charge interest and penalties on any unpaid Federal taxes. If you do not file and you owe tax, the failure-to-file penalty is 5% per month (up to 5 months) of the amount due. If your return is more than 60 days late, you may be subject to a $210 minimum penalty. The IRS will also impose a failure-to-pay penalty of 0.5% per month (up to 25%) of the amount due if you file a return or extension, but don’t pay all your taxes due on time.
If an S Corporation, Multi Member LLC or a Partnership fails to file a tax return or a tax extension, the penalty is $195 PER MONTH, PER PARTNER, LLC MEMBER or SHAREHOLDER for up to 12 months, with additional penalties if the S Corp, LLC or Partnership fails to furnish Schedule K-1s to its shareholders, members or partners.