If you miss the March 15 business tax deadline, your company could face IRS penalties and daily interest charges. For 2026, the deadline moves to Monday, March 16, 2026, because March 15 falls on a Sunday.

The Internal Revenue Service (IRS) imposes penalties for both failing to file and failing to pay. For partnerships and S Corporations, those penalties can add up quickly, even if your business owes no tax.

Here’s what you need to know. 

What is Due March 15?

The March 15 deadline primarily applies to pass-through entities.

Partnerships and Multi-Member LLCs

If your business is taxed as a partnership, you must file:

• Form 1065: U.S. Return of Partnership Income
• Schedule K-1: Issued to each partner

Form 1065 reports the partnership’s income, deductions, and credits/ Schedule K-1 shows each partner’s share of income or loss, which they report on their personal tax return.

Even if your partnership owes zero tax, the IRS can still assess penalties for filing late or failing to provide accurate K-1s.

S Corporations

S Corporations must file:

• Form 1120-S
• Provide Schedule K-1 to each shareholder

S Corps are pass-through entities, meaning profits and losses pass to shareholders’ individual returns. The corporate return itself is informational, but filing late still triggers penalties.

Electing S Corporation Status

Businesses wanting S Corporation Treatment for 2025 must file:

• Form 2553 by March 15

Missing the deadline could delay your S Corp election for an entire tax year.

IRS Penalties for Missing the March 15 Deadline

Partnership Late Filing Penalty

The IRS penalty for partnerships is:

• Assessed per partner, per month
• Charged for each month (or partial month) the return is late
• Applied even if no tax is owed

For businesses with multiple partners, penalties can quickly reach thousands of dollars.

What Happens If You Miss the April 15 Deadline?

While March 15 applies to partnerships and S Corps, April 15 typically applies to individuals and C Corporations.

Failure-to-File Penalty

• 5% of unpaid taxes per month
• Maximum penalty of 25%

Failure-to-Pay Penalty

If you file but don’t pay:

• 0.5% of unpaid taxes per month
• Up to 25% maximum

If you set up an IRS payment plan, the rate drops to 0.25% per month

IRS Interest Charges

Interest:

• Begins accruing from the original due date
• Compounds daily
• Continues until the balance is paid in full

For 2025, the federal underpayment rate is 7% annually for individuals. Corporate overpayments generally earn 6% on the first $10,000 and 5% above that.

Interest combined with penalties can significantly increase what you owe.

Can You File an Extension?

Yes, but timing matters.

Businesses can file Form 7004 before the deadline to receive a six-month extension. Important reminders:

• An extension gives you more time to file
• It does not extend the time to pay
• Taxes owed are still due by the original deadline

Late payment penalties and interest still apply to unpaid balances.

What To Do If You Missed the Deadline

If you didn’t file by April 15th, take action immediately:

1. File your return as soon as possible
2. Pay as much as you can
3. Apply for an installment agreement if you owe less than $50,000
4. Consider requesting penalty abatement if you qualify

The longer you wait, the more expensive it becomes.

Bottom Line

Missing tax deadlines can result in:

• Per-partner monthly penalties
• Failure-to-file penalties up to 25%
• Failure-to-pay penalties up to 25%
• Daily compounded interest

The smartest move is to file immediately and set up a payment plan if needed. Acting quickly can significantly reduce total penalties and interest.