If you filed an extension for your 2010 corporation, partnership or LLC income tax return, this is a friendly reminder that the September 15 due date is just a few days away. Are you ready?
Here’s some good news and some bad news.
First, the good news. The IRS has provided some tax relief to victims of Hurricane Irene. If you live in certain parts of Connecticut, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Puerto Rico and Vermont, the September 15 filing deadline has been extended to October 31. To find out if you qualify for the October 31 extension, visit the IRS website for details.
Here’s some more good news. The IRS is allowing taxpayers until September 22 to file returns normally due September 15 if their tax preparers were affected by Hurricane Irene. By “affected”, the preparer must be located in an area that was under an evacuation order or a severe weather warning because of Hurricane Irene, even if the preparer is not located within the federally declared disaster areas.
Now the bad news.
If you qualify for the October 31 deadline, do not file your return late. If you qualify for the September 22 deadline, do not file your return late. If you must file by the September 15 deadline, do not file your return late.
There are stiff penalties for filing late, even if you are filing an income tax return that has a zero balance due, which is usually the case for S Corporations and Partnerships.
Here is the rule for the late filing of an S Corporation income tax return:
The penalty is $195 for each month or part of a month (up to 12 months) the return is late, times the number of shareholders during any part of the year.
Here’s the rule for late filing of a partnership income tax return:
The penalty is $195 for each month or part of a month (up to 12 months) the return is late, times the number of partners in the partnership during any part of the year.
C Corporation late filing rules are different:
The penalty is 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. If the return is more than 60 days late, the minimum penalty is the smaller of the tax due or $135.
So there you have it. Moral of the story: whether your corporation or partnership return is due September 15 or September 22 or October 31, please file on time.