S Corp Due Date

Today TaxMama hears from Abe in the Tax Parlor, who says “I have a California-based S-Corp, and I know the 1120-S is due 3/15/07. I thought all income gets passed through to my 1040 and doesn’t get taxed. Does this mean that on 03/15/07 I don’t owe any taxes, just the 1120-S showing the numbers on my Profit and Loss Statements?

Dear Abe,

Relax, no worries.

For IRS purposes, your S Corp owes no taxes. Hooray!

I can’t say the same about your state taxes. You’re in California. There’s a minimum annual fee of $800. Or 1.5% of profits, whichever is higher. You’ll need to pay that on March 15th when you file.

Good news, though. For the first year of an S Corp, you don’t have to pay the $800 minimum fee. You only have to pay 1.5% of your profits, if any.

Here is California’s FTB Pub 1060 to explain how that works.

Now, Abe, a suggestion. Just file an extension on March 15th and pay California the $800 using Form 3539. https://www.ftb.ca.gov/forms/06_forms/06_3539.pdf

File form 7004 for the IRS extension and pay nothing. https://www.irs.gov/pub/irs-pdf/f7004.pdf

Then, you have six months to get the 1120S/100S right.

And yes, it will all flow through to your personal tax return in the end.

And remember, you’ll find answers to lots of questions about S Corporations and other tax information, free. Where? At TaxMama.com

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