You must submit a return because the IRS mandates that all corporations, whether or not they generated a profit, must submit an annual tax return. This is due to the fact that there are numerous other tax matters, such as deductions, losses, and credits, that must be disclosed on the tax return. Even if your company didn’t make any money, it can have incurred costs that can be deducted from future earnings.
The IRS may impose fines and interest charges if you fail to file a company tax return. These fines can be very harsh, and if you keep ignoring your tax obligations, they will mount up very rapidly. Additionally, you might need to show proof of your tax compliance if you ever wish to sell your firm or take other measures.
Let’s now discuss quarterly taxes and S-Corps. S-businesses are a unique sort of corporation with a different tax treatment from regular businesses. You are exempt from paying company level federal income tax if you own an S-Corp. Instead, the corporation’s profits or losses are transferred to the shareholders, who then declare them on their individual tax returns.
S-Corps must still pay quarterly estimated taxes even if they anticipate owing at least $1,000 in taxes for the whole year. Based on the corporation’s anticipated annual revenue, these projected taxes are payable in four installments over the course of the year. The corporation’s expected tax payments may need to be modified if its income varies over the year.
In conclusion, you must still submit a corporate tax return even if your firm had no income during the tax year. S-Corporations may still be obliged to pay quarterly estimated taxes even though they are not obligated to pay federal income tax at the corporation level. To prevent fines and maintain compliance with the IRS, it’s critical that you comprehend your tax obligations as a firm owner.