Businesses have an earlier due date compared to individuals, so make sure you get those business returns filed right away!
Deadlines
Business tax returns are due March 15th, 2018, for both the IRS and California Franchise Tax Board (FTB).
If you cannot file by that date, then you may file for an extension, which would be September 15th, 2018. (Keep in mind that this does not excuse you from paying the full tax due by the original due date.)
Here is some helpful information about how to file with the IRS.
Federal Failure to File Penalty (IRS)
If your tax return isn’t filed by the official due date (or by the extended date), your business will be charged a penalty of $195 per month, for each person that was a shareholder or partner in the S corporation or partnership for any part of the year. This penalty can really start to add up especially if there are many shareholders or partners, so make sure you file your business return on time so you don’t have to think about these penalties in the first place.
California Failure to File Penalty (FTB)
As expected, California will also penalize your business for not filing a CA return. Filing late leads to a penalty of 25% of the amount due, as well as $18 per partner or shareholder each month the return isn’t filed.
Have a balance due? There’s a penalty for not paying by the due date as well. The late payment fee is 5% of the unpaid tax plus 0.5% of the unpaid tax for each month it remains unpaid, up to a maximum penalty of 25%. If an LLC fails to pay its annual fee by the due date, the penalty amounts to 10% of the unpaid fee. Balances that are due and have not been paid will also accrue interest. Take a look at the Franchise Tax Board’s Penalty Information page for more details.
Payment Options
Both the IRS and FTB offer a wide range of payment options. A couple of the most popular options include direct pay from your bank account, writing a check, and same day wires. Check out the complete list of options available to you by the FTB and IRS.
If payment in full isn’t an option, an installment agreement is one of the best ways to pay your balance due over time and can be paid by automatic withdrawals from your checking account, credit card, or money orders.
Paying taxes isn’t optional, so make sure you get something situated with the IRS/FTB to minimize your additional penalties and fees if you can’t pay on time. If the agencies contact you multiple times about balances due with no response, they have the ability to put a levy on your account and automatically take funds from it.
If you need more time to prepare your business financials, avoid all the additional costs and call Paragon to file your extension and get your current taxes due paid timely!
