How to calculate interest and late filing fees for a corporate return

Drake Tax does not include a place to enter information to calculate interest and late filing fees for a corporate return. There are different penalties that may be assessed by the IRS for late filing or payment. The following is adapted from the Form 1120 Instructions.

Late Filing Penalty

The penalty is 5% of the unpaid tax for each month or part of a month the return is late, up to 25% of the unpaid tax. The minimum penalty is the smaller of $485 or the total tax due.

Late Payment Penalty

1/2 of 1% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of the unpaid tax

Estimated Tax Penalty

See Drake Tax - 1120: 2220 Penalty for details.