C Corporations:

The IRS has the ability to assess a penalty equal to 5% of the net tax due for each month or part of a month the return is filed late, to a maximum penalty of 25%.

Subchapter S Corporations:

The IRS has the ability to assess a penalty equal to $195 per shareholder for each month the return is filed late(maximum of 12 months). Therefore, the maximum penalty per shareholder is $2,340 if a tax return is filed more than 12 months late.

Partnerships, including multi-member LLCs:

The IRS has the ability to assess a penalty equal to $195 per partner/LLC member for each month the return is filed late(maximum of 12 months).

Remember, the penalties are paid at the business level and are nondeductilbe expenses for tax purposes. To avoid any issues, be sure to file your return prior to the September 15th deadline!

If you're among the millions of converts to do-it-yourself tax software, Drake Software provides taxpayers an easy way to pay their federal estimated tax payment electronically using their credit or debit card. Taxpayers can go to the Drake E-Payment Center, www.1040PayTax.com at any time to make their payment.

To learn more, view the Drake Support website's Pay taxes with credit or debit card page.