Subchapter S Corporation Filing Requirements: Every
corporation (except exempt) must file, regardless of the amount of income
or loss. It must file even if it stops conducting business. Filing ends
when totally dissolved.
Subchapter S Corporation Filing Deadline:
By the 15th day of
the 3rd month following the close of its tax year.
Subchapter S Corporation Extension Deadline & Form Number:
Form
7004 automatically extends the deadline 6 months. A second extension is
not available.
Subchapter S Corporation Penalties:
• $50 penalty per shareholder for
Subchapter S corporation's failure
to provide K-1's to the shareholders.
• If Subchapter S corporation taxes are due, a late filing penalty may be imposed equal to 5% of tax owed per month up to 25%.
• A late payment of tax penalty may also
be imposed equal to one-half of 1% per month up to 25%.
Letter Ruling 9627004: Unlike
a partnership, the IRS Code does not impose a penalty for late filing of a
Subchapter S corporation tax return. Penalties for late payment or late issuance
of K-1s still apply.
Subchapter S Corporation Tax Rates: S corporation profit
or loss is passed through to shareholders and reported on the
shareholders’ tax returns. A Subchapter S corporation generally does not pay tax at
the corporate level.
Exception: If
the Subchapter S corporation was previously a C corporation, the
Subchapter S corporation may be liable for tax on
excess net passive income, certain capital gains, or built-in gains.
Subchapter S Corporation Estimated Tax Requirements:
Shareholders
are responsible for payment of estimated tax on their personal
returns. The Subchapter S corporation must pay estimated tax payments if
corporate level taxes apply.
No Double Tax On Profits:
A Subchapter S corporation conducts business as a
corporation, but is taxed in the same manner as a partnership. A
major advantage of a Subchapter S corporation is that income passed through
to shareholders avoids the double taxation that occurs with a C
corporation.
