Corporate taxes are due in a few short months, are you ready? There are deadlines to understand, penalties to watch out for and simple ways to save in order to make tax time a little less stressful this year. Before you get started, remember that the first installment of taxes is due April 15, 2015. These taxes are different than taxes for partnerships, LLCs and sole proprietorships because corporations are charged on their net profits, once expenses are deducted, requiring IRS Form 1120 to be filed; other business entities are able to pay the profits to the owners who then claim it on their personal taxes once a year.
Don’t Miss Deadlines for Corporate Taxes
Corporate taxes are due at the end of every quarter. For example, taxes for the first quarter, which ends March 31, 2015, are due April 15, 2015. This means that IRS Form 1120 should be filed whether or not you owe taxes. If you miss this deadline or avoid filing the form altogether, you run the risk of paying hefty fines. If you are unable to afford the tax payment, it is typically financially beneficial to obtain a loan to pay the liability and reap the benefits of the deduction later in the year.
Avoid Penalties on Corporate Taxes
If you choose to file or pay your corporate taxes late, the IRS will hit you with a $195 fine per shareholder, per month. This applies whether or not you owe any taxes – the IRS Form 1120 must be filed. This penalty accumulates month after month until you have filed and paid the appropriate taxes and because the penalty is per shareholder, the fines can get extreme for a corporation.
Maximize Deductions on Corporate Taxes
Aside from filing and paying your corporate taxes on time, there are other ways to save. One of the most beneficial ways is to depreciate your equipment over its entire life, rather than taking the deduction during the period it was bought. This enables you to spread the savings over several years, allowing you to have deductions as your corporation continues to grow, therefore decreasing your tax deduction.