March 16 Deadline: Partnerships and S Corporations Must File or Extend Today

Today marks an important federal tax deadline for many business owners. Partnerships and S Corporations operating on a calendar year must file their 2025 tax returns or submit an extension by March 16 to remain compliant with IRS requirements.

For businesses that are not ready to file, the IRS allows a six-month extension, moving the filing deadline to September 15. However, it is important to understand that an extension applies only to the time to file, not to the time to pay any taxes owed.

Why This Deadline Matters

Partnerships and S Corporations are pass-through entities, meaning the business itself generally does not pay federal income tax. Instead, profits and losses pass through to the owners and are reported on their individual tax returns through Schedule K-1.

Because owners rely on these K-1s to complete their personal tax filings, timely filing of business returns is critical. Late filings can create delays and complications for business owners and investors.

IRS Penalties for Late Filing

Failing to file a partnership or S Corporation return on time can result in significant IRS penalties, even if the business does not owe tax.

For the 2025 tax year, the IRS may assess a penalty of $255 per partner or shareholder per month (or part of a month) for up to 12 months if a partnership or S corporation return is filed late without a valid extension and without reasonable cause.

For example:

• A partnership with 3 partners that files 3 months late could face penalties exceeding $2,295.
• Larger partnerships can see penalties accumulate very quickly.

What Businesses Should Do Today

If your business has not yet filed its return, the priority should be to submit the appropriate extension form today:

• Form 7004 – Application for Automatic Extension of Time to File

Filing this extension gives businesses additional time to finalize accounting records, reconcile financials, and ensure the return is prepared accurately.

Final Thoughts

Tax compliance deadlines are easy to overlook, but missing them can lead to avoidable penalties and administrative headaches. Filing on time, or properly extending, helps ensure your business remains compliant and provides owners with the information they need for their individual returns.

If you are unsure whether your business has filed or extended, it is important to confirm with your tax advisor immediately before the deadline passes.