Reporting and payment of taxes
Annually, legal entities with corporate status are required to file financial statements with the U.S. federal tax authorities and to pay taxes. The deadline for submitting reports and paying taxes is the 15th day of the third month after the end of the reporting period. It is also possible to extend the deadline for submission of reports by 6 months.
This option is implemented by submitting form 7004, not later than the initially set deadline. However, this option does not apply to the terms of payment of income tax.
The following types of penalties are provided for late submission of reports and payment of tax:
- Untimely submission of reports entails a penalty of 5% monthly of the unpaid amount of tax. This penalty in total cannot exceed 25% of the unpaid tax amount. The minimum amount of penalty for late submission of reports for more than 60 days is one of the smaller indicators: the amount of tax or $100.
- The penalty for late payment of tax is 0.5% monthly of the unpaid amount of tax. This penalty in total cannot exceed 25% of the unpaid amount of tax.
The penalty for the late submission of reports is reduced by the amount of penalty for late payment of tax, i.e. if the submission of reports and payment of tax will be made on the same day, the total amount of penalties will not exceed the amount of penalty for submission of reports.
Corporations with expected tax liabilities of more than $500 for the reporting period are required to make advance tax payments in four installments during the reporting period. Each of the parts should be paid by the 15th day of the fourth, sixth, ninth and twelfth months, respectively. Each part shall be paid at least 25% less of the following amounts:
- the amount of tax that has arisen in the current reporting period;
- the amount of tax for the previous reporting period.
This indicator is considered only if the corporation had tax liabilities for the previous reporting period and the reporting period was not less than 12 months. Corporations with pretax profit of $1 million or more in any of the previous three reporting periods may take into account tax liabilities for the previous reporting period only for the first part.
For non-payment or partial underpayment of advance tax, penalties are charged on the unpaid or underpaid amount at the federal rate set for short-term loans, increased by 5%. Penalty interest is accrued from the date when the relevant portion of the advance tax had to be paid.
If you want to avoid penalties and other negative consequences, you should use the services of professional companies. You can always find a company that provides tax assistance. These companies work specifically to give the corporation the opportunity not to think about their taxes and to do other more important things. Here is an example of a company that works in tax preparation tucson az https://southwesttaxassociates.com/. You can use its services if you need help with taxes.