Missing a business tax deadline in the United States can lead to penalties, interest charges, and even legal consequences. Whether you operate as a sole proprietor, LLC, S-corp, or C-corp, the IRS expects timely filing and payment. If you’ve missed the deadline, here’s what you need to know—and what steps to take next.
Sole Proprietors and Single-Member LLCs: File with your personal 1040 (Schedule C). The deadline is usually April 15.
Partnerships (Form 1065) and S-Corps (Form 1120S): Deadline is March 15.
C-Corporations (Form 1120): Deadline is April 15 (calendar-year filers).
Missing these dates means penalties start unless you filed an extension.
Extensions Help, But They Don't Stop Interest
If you filed an extension, you usually get:
6 more months to file (e.g., until September 15 or October 15).
But the payment due date remains the same as the original deadline. Failure to pay on time still incurs interest and penalties.
Immediate Consequences of Missing the Deadline
The IRS imposes two main penalties:
Failure-to-File Penalty:
Typically 5% of unpaid taxes for each month (or part of a month) the return is late, (up to 25% maximum).
If you file more than 60 days late, the minimum penalty is $485 (for 2024) or 100% of the tax due, whichever is less.
Failure-to-Pay Penalty:
0.5% of unpaid taxes per month (up to 25% total).
If you set up an IRS payment plan, this penalty drops to 0.25% per month.
⏱️ Tip: Filing even if you can’t pay can significantly reduce your total penalties.
The IRS charges daily compounded interest on unpaid taxes starting from the due date (8% for 2024, adjusted quarterly).
Interest continues accruing until the full balance is paid.
If the IRS suspects willful tax evasion, penalties can include fines up to $250,000 (for businesses) or even criminal charges.
Filing late is better than not filing at all.
Use Form 7004 (for extensions) if you qualify, but note that this only extends the filing deadline, not the payment deadline.
Partial payments reduce penalties and interest.
The IRS offers short-term (120-day) or long-term payment plans.
The IRS may waive penalties for reasonable cause (e.g., natural disasters, serious illness, or death in the family).
Use IRS Form 843 to request an abatement.
Online Payment Agreement (OPA): Available for balances under $25,000 (long-term) for businesses. The balance limit includes tax, penalties, and interest.
Individual tax returns vs. business taxes: A sole proprietor or independent contractor should apply for a payment plan as an individual rather than as a business. Short-term plans (paid in 180 days or less) are available for balances under $100,000. Long-term plans are available for balances under $50,000.
Installment Agreement: This is available for larger debts, but may require financial disclosure.
You may receive an IRS notice or letter demanding payment or filing. If you ignore tax debts, the IRS can:
Place a Federal Tax Lien (hurting your credit and business reputation).
Issue a Tax Levy (seizing your bank account, receivables, or property).
Revoke Passports (for individual or small business debts over the inflation-adjusted threshold, which is $62,000 for 2024 taxes).
Pursue Legal Action (in extreme cases).
✅ Mark tax deadlines in your calendar (April 15 for most businesses, March 15 for S-corps & partnerships).
✅ Use accounting software (QuickBooks, Xero) or hire a tax professional.
✅ Make estimated tax payments (if required).
Missing a business tax deadline is stressful but fixable. The key is to file immediately, pay what you can, and communicate with the IRS to avoid harsh penalties. If you’re overwhelmed, consult a CPA or tax attorney to help negotiate a resolution.
Need help? The IRS offers free resources at IRS.gov or by phone at 1-800-829-1040. For long-term tax help, check out the resources available through Preferred CFO. Schedule a free appointment today to learn more!