IRS Publication 542 — Corporations

Basis of each piece of property Bases of all properties (within that category) If the corporation wishes to make this adjustment in some other way, it must get IRS approval. The corporation files a request for approval with its income tax return for the tax year in which it receives the contribution. Filing and Paying Income Taxes The federal income tax is a pay -as-you-go tax. A corporation must generally make estimated tax payments as it earns or receives income during its tax year. After the end of the year, the corporation must file an income tax return. This section will help you determine when and how to pay and file corporate income taxes.

For certain corporations affected by federally declared disasters such as hurricanes, the due dates for filing returns, paying taxes, and performing other time -sensitive acts may be extended. The IRS may also forgive the interest and penalties on any underpaid tax for the length of any extension. For more information, visit IRS.gov/DisasterT axRelief. Income Tax Return This section will help you determine when and how to report a corporation's income tax. Who must file. Unless exempt under section 501 of the Internal Revenue Code, all domestic corporations in existence for any part of a tax year (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income.

Which form to file. A domestic entity electing to be classified as an association taxable as a corporation must generally file Form 1120, U.S. Corporation Income Tax Return, to report its income, gains, losses, deductions, credits, and to figure its income tax liability. Certain organizations and entities must, or may elect to, file special returns. For more information, see Special Returns for Certain Organizations in the Instructions for Form 1120. Electronic filing. Corporations can generally electronically file ( e-file) Form 1120 and certain related forms, schedules, and attachments. However, for returns filed on or after January 1, 2024, corporations that file 10 or more returns are required to efile. However, these corporations can request a waiver of the electronic filing requirements. For more information on electronic filing, see the Instructions for Form 1120, or the applicable instructions for your income tax return.

When to file. Generally, a corporation must file its income tax return by the 15th day of the 4th month after the end of its tax year. A new corporation filing a short -period TIP return must generally file by the 15th day of the 4th month after the short period ends. A corporation that has dissolved must generally file by the 15th day of the 4th month after the date it dissolved.

However, a corporation with a fiscal tax year ending June 30 must file by the 15th day of the 3rd month after the end of its tax year. A corporation with a short tax year ending anytime in June will be treated as if the short period ended June 30 and must file by the 15th day of the 3rd month after the end of its tax year.

If the due date falls on a Saturday, Sunday, or legal holiday, the due date is extended to the next business day. Extension of time to file. File Form 7004, Application for Automatic Extension of Time T o File Certain Business Income Tax, Information, and Other Returns, to request an extension of time to file a corporation’s income tax return. The IRS will grant the extension if the corporation completes the form properly, files it, and pays any tax due by the original due date for the return.

Form 7004 does not extend the time for paying the tax due on the return. Interest, and possibly penalties, will be charged on any part of the final tax due not shown as a balance due on Form 7004. The interest is figured from the original due date of the return to the date of payment. For more information, see the Instructions for Form 7004.

How to pay your taxes. A corporation must pay its tax due in full no later than the due date for filing its tax return (not including extensions).

Electronic Federal Tax Payment System (EFTPS). Corporations must generally use EFTPS to make deposits of all tax liabilities (including social security, Medicare, withheld income, excise, and corporate income taxes). For more information on EFTPS and enrollment, visit www.eftps.gov.

Penalties Generally, if the corporation receives a notice about interest and penalties after it files its return, send the IRS an explanation and we will determine if the corporation meets reasonable -cause criteria. Do not attach an explanation when the corporation's return is filed. See the instructions for your income tax return. Late filing of return. A corporation that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. If the corporation is charged a penalty for late payment of tax (discussed next) for the same period of time, the penalty for late filing is reduced by the amount of the penalty for late payment. A minimum penalty applies for a return that is over 60 days late. The minimum penalty amount may be adjusted for inflation. See the Instructions for Form 1120 (or the instructions for your applicable return) for the minimum penalty amount for the current tax year. The penalty will not be imposed if the corporation CAUTION !

Publication 542 (1-2024) 5