If I dissolve an S-Corp on December 31st, do I need to file taxes immediately, or is it still due at regular tax time?
You have 2 months and 15 days from the date you dissolve the S-Corp to file a final return or request an extension. If you dissolve on 12/31, your filing deadline is March 15.
Devan said:
You have 2 months and 15 days from the date you dissolve the S-Corp to file a final return or request an extension. If you dissolve on 12/31, your filing deadline is March 15.
Totally agree. Dissolving effective 12/31 is the smoothest option to avoid complications.
There are two steps to consider: 1) dissolving the entity with the state and 2) filing the final tax return.
For the state dissolution, check your state’s Secretary of State website. Most states let you dissolve online, but some might need a signed form. I recommend doing this before the end of the year so everything closes out on 12/31.
For the final tax return, make sure to check the “final” box on the first page of the 1120S form. The return is due 2.5 months after the year ends. If your year ends 12/31, the deadline is the same as normal, 3/15.
If your operations ended earlier, like 10/31, you might still want to use a 12/31 year-end on your tax form. Filing a short year could cause unnecessary notices from the IRS. I’ve handled cases where clients got notices for “late” filings due to short years, even though everything was done correctly. It’s often easier to just stick to the calendar year-end to avoid hassles.
If you don’t file the final return before the year ends, it could carry over into 2025, which means you’d need to file another tax return for 2025.
Hollis said:
If you don’t file the final return before the year ends, it could carry over into 2025, which means you’d need to file another tax return for 2025.
Wait, what? How would you even file a return when the official forms for the new year aren’t out yet and the IRS isn’t accepting them?
@Shan
Technically, S-Corp returns are due 2 months and 15 days after the year ends. You could file earlier using the previous year’s forms, but that’s rare. Most people dissolve at the end of the year and follow the regular tax schedule.
@Kiran
Exactly. Once you’ve filed for 2023, you can’t file another return for the same year. Dissolving at the end of the year and filing normally for 2024 is way easier and avoids unnecessary confusion.
Hollis said:
If you don’t file the final return before the year ends, it could carry over into 2025, which means you’d need to file another tax return for 2025.
What if I delay dissolving the company until next year and just report no income since it won’t be active?
@Niko
You can definitely delay the dissolution until 2025 and file a final return for 2025, even if it’s a zero-income return. That return would be due in early 2026.
@Niko
Yep, the final return would still follow the usual tax schedule for that year.
@Niko
You can dissolve whenever, but if it’s still active in 2025, you’ll have to file a 2025 return. Not sure if that helps you in any way.