Finance

Do I have to file back taxes on my inactive corporation?

I started a California contracting corporation in 2005 after which I began to attend school out of state. I never used the corporation during the 2005, 2006, 2007 years. I am now filing back taxes on the corporation and reporting zero income. Are there any taxes due?
min read
Opinions expressed by Entrepreneur contributors are their own.
Even if your corporation earned no income, many states have what they call "minimum franchise taxes." This is like an annual fee/tax for the privilege of being able to say you are an incorporated entity in the state.

There are also reporting requirements, like filing annual taxes -- again, even if just to show that you did no business. Once formed, a corporation has ongoing maintenance requirements even if you're out of state and not using it. Speak to a local accountant familiar with business issues to see if there's a way to streamline the tax filing process (in light of the lack of activity) and to avoid any penalties and interest that might have accrued.

More from Entrepreneur

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

4 Pieces of Financial Advice Every Budding Entrepreneur Needs to Hear