Did you know there is a penalty for failure to file a tax return for Partnerships or S Corporations? Neither one of those entities have to pay federal income tax. The federal tax return is an informational return for the IRS, with the income flowing to the owners tax returns on a Form K-1. But if you fail to file an S-Corp tax return on March 15, 2010 or a Partnership tax return on April 15, 2010 and you fail to file an extension you will be penalized. The penalty is $195 per partner or shareholder per month. Let’s say you have an S- Corp with four shareholders and you thought you had until April 15th 2010 to file the 2009 tax return. The IRS would asses a penalty of $780 for being one month late! And if you didn’t file the return until the extension deadline of September 15th 2010, the IRS would assess a $3,900 penalty!!
There are some rules your accountant can apply to try and get those penalties abated but why risk it? Remember to file or extend your S-Corp tax return by March 15th 2010 or your partnership tax return by April 15th, 2010.
