If your small business is a corporation, March 15 is the most critical tax return deadline of the year - even more important than April 15. Find out why in this article.
First, some good news. The March 15 deadline is actually March 16. Go ahead and breathe a big sigh of relief, now that you know you have an extra 24 hours to get your act together. Here's why: Whenever a federal tax deadline falls on a Saturday, Sunday or federal holiday, the deadline is automatically moved to the next business day. Since March 15 is a Sunday, the deadline is changed to Monday March 16.
Second, more good news. Keep in mind that to comply with the March 16 deadline, the appropriate tax forms discussed below must be postmarked on or before that date. To file on time does not mean that the IRS must receive the return on or before that date.
Now let's move on to discuss what you must do by March 16.
If your business is a corporation, whether a regular C corporation or an S corporation, March 16 is the deadline for filing your corporate income tax return. C corporations file Form 1120; S corporations file Form 1120S.
If you are unable to file your corporate income tax return by March 16, do not despair. You can obtain an automatic, "no questions asked" extension by filing Form 7004 on or before March 16. Form 7004 works for either C corporations or S corporations. It is also one of the easiest tax forms to complete and does not require a signature.
By filing Form 7004 you are given an additional six months to file the corporate income tax return. The March 16 deadline has been magically changed to September 15. Now you can do the return in the lazy hazy days of summer, if you like.
If you go the extension route, here are some words of caution. Don't forget that filing an extension only extends the time to file the return. It is not an extension of time to pay any tax due on the return. For S corporations, this is usually not a problem, because S corporations typically don't pay any corporate income tax. But for C corporations, if you have a balance due on the return and wait until September 15 to pay it, you will be charged late payment penalties and interest. So if you own a C corporation, do enough calculating to determine whether you will owe tax and make a payment if necessary by March 16.
For S corporations, also remember that you really need to prepare Form 1120S before you can properly prepare your personal income tax return. So don't file Form 7004 and then file your personal return before doing the corporate return. As part of the corporate return, S corporations give each shareholder a Schedule K-1, which reports your share of the corporation's profit or loss. That K-1 information must be transferred to your Form 1040. So if you file an extension for Form 1120S, you will also need to file an extension for your Form 1040, unless you happen to get the corporate return done by April 15.
Author Resource:-
Looking for more small business tax tips? For a free copy of the Special Report "How To Instantly Double Your Deductions", visit www.YouSaveOnTaxes.com. Wayne M. Davies is author of 3 ebooks on small business tax reduction strategies.
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