Filing your C corporation's taxes late is better than not filing at all. In most situations, there's not much difference between how you file the corporate tax return -- Form 1120 -- late and how you would file it by the original deadline. Depending on how late the return is as well as the amount of income tax that's due with it, you may have some additional issues to contend with, such as penalty charges.
C-Corp Tax Forms
All C corporations must file annual tax returns on Form 1120 with the Internal Revenue Service by the 15th day -- or the next business day if it falls on a holiday or weekend -- of the third month after the tax year comes to an end. Whether the taxes are one day or one decade late, the corporation still has an obligation to file. If the late return relates to an old tax year, the IRS website has a Prior Year Products page where you can download all the 1120s used in past years (see Resources). For example, if the late
corporate tax return is from 1975, you have access to the 1120, its instructions and all related schedules and attachments you may need from that year.
Include Tax Payment
Pay as much of the corporation's tax bill as you can when filing the return. Since the deadline has passed, penalties for filing and paying late may already be increasing the C corporation's unpaid tax bill. A penalty for filing late is assessed at the rate of 5 percent for each month the return is late for a maximum of 25 percent. This means that your C corporation may owe an additional 25 percent of its tax liability just for being five or six months late with its Form 1120. In addition, the C corporation may get hit with a second penalty for paying its tax bill late, which increases by one-half of one percent each month until the corporate taxes are paid off in full or the total penalty charge reaches its 25-percent maximum. If both penalties are charged in the same month, the IRS reduces the late filing penalty to 4.5 percent.