Do you operate your business as a partnership, a limited liability company (LLC) taxed as a partnership, or an S corporation? These structures are known as pass-through entities because income, deductions, and tax credits pass through to owners and are reported on their individual federal tax returns.
While pass-through entities generally don’t pay federal income tax at the entity level, they are still required to file federal tax returns. Below are key deadlines and tax law updates to know as you prepare your 2025 pass-through entity tax filing.
March 16, 2026 Filing Deadline for Pass-Through Entities
Pass-through entities must file annual federal tax returns using the appropriate IRS form:
Form 1065 – Partnerships and LLCs taxed as partnerships
Form 1120-S – S corporations
For entities using a calendar tax year, the 2025 federal return is due March 16, 2026 (March 15 falls on a Sunday).
Filing an Extension
Entities can request a six-month automatic extension by filing IRS Form 7004 by March 16, 2026. This extends the filing deadline to September 15, 2026.
Important: If your pass-through entity files an extension, owners will typically also need to extend their individual 2025 tax returns to October 15, 2026.
Schedule K-1 Requirements
Each pass-through entity must issue a Schedule K-1 to every owner. This form reports each owner’s share of:
- Income
- Deductions
- Credits
Schedules K-1 may be delivered electronically and must be included with the entity’s tax filing.
Because owners rely on K-1s to prepare their individual returns, earlier distribution is strongly recommended. If the entity’s return is extended, the deadline for issuing K-1s becomes September 15, 2026.
3 Major Tax Law Changes Affecting 2025 Returns
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced several changes impacting pass-through entities. Here are three that matter most:
1. Restored 100% First-Year Depreciation
100% bonus depreciation is permanently restored for eligible assets placed in service after January 19, 2025.
Section 179 expensing limit increased to $2.5 million (up from $1.25 million).
The phaseout now begins at $4 million in asset acquisitions (previously $3.13 million).
Qualified production property, including certain factory buildings, now qualifies for 100% first-year depreciation.
2. Immediate Deduction for R&E Expenditures
Domestic research and experimental (R&E) expenses may now be fully deducted for tax years beginning in 2025 and later.
Previously required five-year amortization is eliminated.
Eligible small businesses may retroactively apply this rule to tax years beginning in 2022–2024.
All taxpayers may elect to deduct remaining unamortized R&E costs over one or two years starting in 2025.
3. Improved Business Interest Expense Rules
For tax years beginning in 2025 and beyond, the OBBBA permanently adopted more favorable rules for deducting business interest expense.
While many small and midsize pass-through entities remain exempt from these limitations, eligibility can vary—professional review is recommended.
Time to Get Rolling
The March 16, 2026 deadline for filing 2025 pass-through entity returns is approaching quickly. Even if you plan to extend, action is required by March 16.
Early planning helps avoid delays with Schedule K-1s and individual filings.
Contact us now to get started and ensure your pass-through entity stays compliant.
Frequently Asked Questions About the March 16, 2026, Tax Deadline
The following FAQs summarize key IRS filing deadlines and requirements for pass-through entities for the 2025 tax year.
What is the 2025 tax filing deadline for pass-through entities?
For calendar-year partnerships, LLCs taxed as partnerships, and S corporations, the federal income tax return for the 2025 tax year is due March 16, 2026, because March 15 falls on a Sunday.
Which IRS forms do pass-through entities file?
Partnerships and LLCs taxed as partnerships file IRS Form 1065, while S corporations file IRS Form 1120-S for the 2025 tax year.
How do pass-through entities request a filing extension?
Pass-through entities may request an automatic six-month extension by filing IRS Form 7004 by March 16, 2026, extending the filing deadline to September 15, 2026.
Does a filing extension delay taxes owed by owners?
No. A filing extension delays only the return filing deadline. It does not extend the time to pay taxes owed by owners, who may still need to make estimated tax payments.
When are Schedule K-1s due to owners?
Schedules K-1 must be provided to owners by the entity’s filing deadline. If the return is extended, Schedule K-1s are due by September 15, 2026.
What major 2025 tax law changes affect pass-through entities?
For tax years beginning in 2025, the new law restores 100% first-year depreciation, allows immediate deduction of domestic research and experimental expenditures, and improves business interest expense deduction rules.
Contact our office if you need assistance.