What do I do if I forgot to file my business tax return extension request on March 15?

By Larry Holmes, CPA, MBT

First, don’t panic.  California is a “paperless” extension.  So California grants you an automatic extension to file even if you don’t file a paper extension with them.

Second, there is no penalty for filing late if there is no tax liability for Federal.  So go ahead and file the return late and you shouldn’t have a problem if there is no income tax liability.

Finally, the Federal penalty for filing a delinquent return is 5% for each month (or fraction thereof) up to 25%.  The penalty is computed only on the net amount of tax due, if any, on the return after credit has been given for amounts paid through estimated tax payments and any other credits.  So if the business has not tax due, then there is no late filing penalty.  If there is a balance due, the penalty can be avoided if there was “reasonable cause” for filing late.  The best thing to do is to speak to a tax professional quickly so that you can get help on possible reasonable cause defenses.

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