Startup Final Return Filing Package

How do I file a final tax return with the IRS?

The final tax return for a C-Corp or LLC is due 3 and half months after the month the company legally dissolved with the state of incorporation. Additionally, Form 966 is required to be filed forCorporations within 30 days of dissolution, and a letter must be sent to the IRS to relinquish use of the EIN number. You also have to show all debts to the tax agencies are satisfied.

Sound complicated? No worries! Our Final Return Package makes filing as simple and inexpensive as possible, based on your level of income and expense transactions. The package includes:

• Extension filing, if waiting for articles of dissolution.
• Tax Filings – 1120 or 1065, one State, and Form 5472, if required
• Form 966 (required for C-Corps only)
• EIN Cancellation Letter
• Form 982 – Discharge of Debt

Beware of Hidden Requirements When Dissolving A Corporation

Many states will block a corporation from closing unless they are up to date on their filings. For example, Delaware requires all Franchise Tax Annual Reports to be filed, and California required minimum tax for each year to be paid. Also, any income received after the company closes requires an unincorporated business tax filing, so make sure you cease all activities after dissolution.

Informational returns can be another stumbling point. If dividends or other payouts were made from earnings and profits, then reporting these transactions on 1099-DIV or 1042-S is required.Repayments of loans could trigger requirements for 1099-INT filings. These returns are typically dueJanuary 31st the year after dissolution, but may have withholding requirements, so it is smart to discuss with an accountant experienced in dissolution prior to making payments.

There are also lots of other little landmines to avoid. SAFE notes remaining unpaid at dissolution don’t automatically cancel, and can lead to cancellation of debt income if there are not sufficient losses on the books to offset this. Debt income reporting depends on the terms of the agreement, so please share these agreements with your tax accountant. Sign up for a consultation if you think any of these issues apply to your situation.

The Easiest Way to File Final Tax Returns for a Corporation or LLC

At Cleer, we make it easy to wind everything up and have the peace of mind that all these details were taken care of and filed correctly. We prepare your final C-Corp or LLC tax return, one state return, Form 966 (required within 30 days of dissolution for C-Corps), and your EIN cancellation letter upon Federal return submission, all included in the Final Tax Return Package. We also offer an extension at no additional cost, as sometimes it can take weeks to get the Certificate of Dissolution from your State.

If you need legal help with the dissolution requirements, we have legal partners we can refer you to, who offer a discounted package to guide our clients through the dissolution process, such as board resolutions and articles of dissolution. You can email Customer Success for a referral.

It’s important to note that a company must be up to date on all tax filings in order to dissolve. We can help you with your prior years’ tax returns, financial statements or getting your books up to date with our Look back Bookkeeping Service to get months or years of books ready for filing.

For more information on the dissolution process, read our blog post How To Dissolve Your Corporation in Seven Steps.