Consequences of Failing to File 1120S
Audio version available here:
https://static.wixstatic.com/mp3/5270f0_c8201810f6d244fd8d12814e59ce535b.mp3
Length: approx. 1 min. 20 sec.
At XQ CPA, we understand that managing your S Corp during tax season can be frustrating. You may make mistakes, or wait until the last minute to put together your tax return. While filing an extension sounds like the smart option, you must keep in mind that an extension to file is not an extension to pay, and failing to pay on time can result in penalties. For an S Corporation, you need to file an 1120S. Failing to do so on time, whether in April or September (depending on if you filed an extension), can incur the following penalties:
If you do NOT owe taxes, you must pay $220 a month (up to 12 months) times the number of shareholders in your company.
If you DO owe taxes, add 5% of your tax balance to the penalty every month (up to 25% of the total tax balance).
For more details, check out our YouTube video on S Corp penalties!
Paying a penalty to the IRS is a waste of hard-earned money, so ensure you do not fall into trouble by planning ahead and filing early. Unsure of how to start tax planning? Contact us at XQ CPA to help! Make an appointment on our website, www.xqcpahouston.com, or give us a call at 832-295-3353. We would love to help you.
