Welcome. Thank you for choosing us
to assist you. My name is ***** ***** my goal is to help make your life, a little... less taxing.
What is your business set up as? A C-corp, an S-corp, partnership
, or LLC
? If your business is a corporation, until you officially dissolve it, you are required to file a tax return
, even id
there have been no transactions. Some states
require than an annual franchise tax
be paid. In addition, if you are an S-corp, there is a steep penalty for not filing
a return. I know that you stated that there have been no transactions, therefore, income
tax would be due, but I am providing you with general information. SEE BELOW:
Filing Without Tax Due
If you file your S corporation income tax return late and no tax is due, the late filing penalty is $195 per month or for any portion of a month the return is late multiplied by the number of corporate shareholders
. For example, if you have three corporate shareholders and the tax return is filed one month late, calculate the penalty by multiplying the $195 monthly penalty by the one month the return is filed late multiplied by your three shareholders. The total penalty is $585.
Filing With Tax Due
If you file your income tax return late and the S corporation owes taxes, the IRS
imposes an additional 5 percent penalty on the unpaid tax for each month or portion of a month the return remains unfiled. For example, if your S corporation’s tax is $5,000, compute the penalty by multiplying the $5,000 by 5 percent to get $250. Now add the $250 penalty to the $585 late filing penalty for a total of $835. The maximum IRS-imposed penalty is 25 percent of the unpaid tax amount. The penalty and unpaid tax are added together to help determine how much you owe the IRS.
Failing to File
When you fail to file a Form
1120 by the deadline
, the corporation is charged a monthly penalty that's equal to 5 percent of any income tax that remains unpaid. Moreover, the corporation will reach the maximum 25 percent penalty after the fifth month that the return remains unfiled. Even if the corporation wouldn't have reported any taxable income
had the return been filed, the IRS will still charge a penalty of $100 once the return is more than 60 days late.
Let me know if you require further assistance with this matter.