For partnerships and S-corporations, the March 15th tax deadline is one of the most significant dates on the calendar. Below, we will break down the essentials to ensure your business is prepared and compliant.

Why is the March 15th Deadline Important?

Partnerships and S-corporations are pass-through entities, meaning they do not pay federal income tax at the entity level. Instead, their income or losses and other tax items are passed through to their individual partners or shareholders on their personal tax returns. Meeting the March 15th filing deadline ensures these individuals have the necessary information to complete their personal returns by the April 15th deadline.

What Needs to Be Filed?

• Form 1065 for Partnerships

Partnerships must file Form 1065, U.S. Return for Partnership Income, by March 15th. Along with the form, each partner receives a Schedule K-1 detailing their share of partnership income or loss and other tax items. Returns and K-1s also must be filed for each state the business has a physical nexus in.

• Form 1120-S for S-Corporations

S-corporations are required to file form 1120-S, U.S. Income Tax Return for an S Corporation, by March 15th. Like partnerships, S-corporations must issue a Schedule K-1 to their partners and shareholders. Returns and K-1s also must be filed for each state the business has a physical nexus in.

Tips for Meeting the March 15th Deadline

The best way to manage the March 15th deadline is to organize early. Gather all financial documents, income receipts, expense records, and more documents to accurately prepare your return. However, the deadline is quickly approaching and it may best to work with a CPA. A CPA can provide valuable expertise to ensure your return is accurate and compliant with IRS and state regulations.

If you are worried you will be unable to meet the March 15th deadline, you can file for an automatic extension. The extension pushed the return due date to September 15th. It is important to note, however, that the extension is just on filing the return. Any taxes owed from the partnership or s-corporation are still due by April 15th.

Consequences of Missing the March 15th Deadline

Failing to file your partnership or S-corporation tax return on time can result in steep penalties.

The penalty for failing to file is $235 per partner per month. These penalties can add up quickly.

Should you need help with your partnership or S-corporation, reach out to Safdar CPA today!