March 15 Taxes: Business and S-Corp Deadline

While many associate tax season with April 15, an earlier deadline exists for specific business structures. For the 2024 tax year, this deadline is March 17, 2025. This date applies to businesses that pass their income, losses, deductions, and credits through to their owners to be taxed at the individual level. Understanding this deadline is a component of tax compliance for these owners, as the mid-March date is structured to allow for the orderly flow of tax information from the business to its owners ahead of the individual filing deadline.

Business Entities with a March 15 Deadline

The mid-March tax deadline primarily affects pass-through entities, specifically S corporations and partnerships. These business structures do not pay income tax themselves. Instead, the financial results of the business are “passed through” to the owners, who then report this information on their personal tax returns and pay the corresponding tax. This structure avoids the double taxation that can occur with C corporations, where the corporation pays tax on its profits and shareholders pay tax again on dividends.

The reason for the earlier deadline is to facilitate a smooth tax season for the individual owners. S corporations and partnerships must complete their own informational tax returns to determine the profit and loss for the year. This information is then allocated to each owner, ensuring they receive it with enough time to complete their own returns by the April 15 deadline.

This deadline applies to businesses that use a calendar year for their accounting, meaning their tax year ends on December 31. If the filing date falls on a weekend or holiday, the deadline moves to the next business day. For businesses that operate on a different fiscal year, the deadline is the 15th day of the third month after the close of their fiscal year. For instance, a partnership with a fiscal year ending on March 31 would have a tax filing deadline of June 15.

Required Tax Forms and Information

S corporations are required to file Form 1120-S, U.S. Income Tax Return for an S Corporation. Partnerships, including many multi-member Limited Liability Companies (LLCs) that elect to be treated as partnerships for tax purposes, must file Form 1065, U.S. Return of Partnership Income. These forms report the company’s overall financial performance, including its income, deductions, and credits for the tax year.

After the business completes its main tax return, it must prepare a Schedule K-1 for each individual shareholder or partner. This document details each owner’s specific share of the business’s financial items. For example, if a two-partner business earned $100,000 in profit with a 50/50 ownership agreement, each partner’s Schedule K-1 would report $50,000 in income.

To prepare these returns, businesses need to gather several documents:

• A complete income statement, also known as a profit and loss statement, which lists all revenues and expenses.
• A balance sheet, which provides a snapshot of the company’s assets, liabilities, and equity.
• Records of any capital contributions made by owners and any distributions taken out during the year.
• The correct name, address, and tax identification number for each owner.

Filing a Tax Extension

Businesses unable to file their tax return by the deadline can request an automatic six-month extension by filing Form 7004. For the 2024 tax year, filing this form pushes the deadline for submitting the completed Form 1120-S or Form 1065 to September 16, 2025. The form requires the business’s identifying information, such as its name, address, and Employer Identification Number (EIN). The filer must also indicate which tax form they are requesting an extension for.

The form can be filed electronically through the IRS e-file system or mailed to the appropriate IRS address. Form 7004 provides an extension of time to file, not an extension of time to pay. If the business expects to owe taxes, it must estimate its tax liability for the year and pay that amount by the original March 17, 2025 deadline. Failure to pay the estimated tax by the deadline can result in penalties and interest charges, even if a valid extension to file has been granted.

Penalties for Missing the Deadline

Failing to meet the mid-March deadline without a proper extension can lead to financial penalties from the IRS for both filing late and paying late. For late filing, the IRS imposes a penalty that is assessed per owner for each month the return is late, for up to 12 months. For partnership returns (Form 1065) due in 2025, the penalty is $235 per partner, per month. For S corporation returns (Form 1120-S), the penalty is $245 per shareholder, per month. If a return is filed more than 60 days late, the minimum penalty for 2025 is the smaller of $510 or the total tax due on the return.

Separate from the filing penalty, there are consequences for late payment of taxes. If a business owes tax and does not pay it by the due date, it will be subject to a failure-to-pay penalty. This penalty is 0.5% of the unpaid tax for each month or part of a month the tax remains unpaid, and the penalty is capped at 25% of the unpaid tax. Interest will also be charged on the underpayment from the due date of the return until the tax is paid in full.