Tax season is here and that means you want to make sure that your business is meeting its tax obligations.
One of the most important parts of the tax obligations is the business tax due dates. You want to make sure that you are on top of these tax deadlines so that your business does not run into any issues.
We have put together this comprehensive guide on what a company’s tax obligations are and what the due dates are.
The Business Tax Due Dates for 2020
Taxes for a business are more complicated than we would like it to be. The business tax due dates depend on the structure of your business – among many other factors.
Before jumping in, we trust that you have kept accurate records of your accounting – either cash and accrual. This is crucial for your business and for filing your company’s tax returns.
Now let us look into the tax obligations for businesses:
There are two types of tax obligations – business taxes and employer taxes. The former is a record of profits, losses, and the overall income for your company. The employer taxes are the income, medicare, and social security taxes that you have to pay on behalf of your employees (make sure you know the obligations for W2 vs 1099 employees).
As a reminder, you must make sure that you are fiscally conservative – so that you have savings in order to pay your company’s taxes.
If your business is a sole proprietorship, partnership, Limited Liability Corporation (LLC) or an S Corporation there is no obligation to pay corporate income tax. This is a requirement for C Corporations. The former business structures require income tax to be paid on personal tax returns.
Sole proprietorships are to use Form 1099.LLC’s and S Corporations use Form 1065. However, if your LLC is a corporation and not a partnership, you would use Form 1120.
Now let us look at the deadlines:
Deadlines
Make sure you keep an eye out for these deadlines. We recommend writing them down and placing them in a place that you always look at.
- Partnerships and LLC’s MUST be filed by March 16
- S Corps to file business tax returns by March 16
- C Corps to file business tax returns by April 15
- Sole proprietorship and single-member LLC tax returns for Schedule C to be filed by April 15
- First Quarter estimated tax payments by April 15
- Second Quarter estimated tax payments by June 15
- Third Quarter estimated tax payments by September 15
- Fourth Quarter estimated tax payments by December 15
- Partnerships must file Form 8813 quarterly pay voucher and pay any due taxes by June 15, September 15, and December 15
As you can see, business structures are required to make estimated tax payments. This is how the business pays income tax on all earnings that are not subject to any tax withholding. Essentially, the business is paying its tax each quarter as opposed to once at the end of the tax year.
If you are unable to meet these deadlines you can request a six-month extension from the IRS for the form(s) you need to postpone.
More On Employer Taxes
We have mentioned employer taxes already, but here is some more information that you need to know.
Here are the forms you may need to file on behalf of your employees along with their respective deadlines:
- Form 940 (Annual Federal Unemployment Tax Return) by January 31
- Form 941 (Employer’s Quarterly Federal Tax Return) due by the last day of the first calendar month after the calendar quarter ends
- Form 943 (For Agricultural Employees only) due by January 31
- Form 944 (Employer’s Annual Federal Tax Return) due by January 31
- Form 945 (Annual Return of Withheld Federal Income Tax) due by January 31
If your business has employees, make sure you are fulfilling your employer tax obligations by the due dates.
Hiring a CPA
We do not doubt that you are slightly overwhelmed by the information in this guide. Filing your personal income tax return can be stressful enough – and having to file them for your business is even more challenging.
This is why we recommend hiring a CPA. If you haven’t already, hiring a CPA for small business is ideal for managing your businesses’ finances and fulfilling your tax obligations.
Here are some additional reasons why you should consider hiring a CPA:
A CPA is great for helping you decide your business structure. Your CPA will know what is the best structure for the type of business that you have as well as what is best to reduce and simplify your tax obligations. They will help you with the cash versus accrual accounting options and let you know which method is better for your business.
The CPA, of course, is the best person for keeping records of your accounts. They are the person who can keep an accurate account of your income, expenses, possible tax obligations, and deductions. When it comes to tax time especially, you will depend on accurate records and the CPA will definitely do a better job than you can!
And of course, the CPA is the person who can help you with your tax obligations. They will be aware of all the business tax due dates and will make sure your tax returns are filed by the due dates. They will also know all the laws regarding taxes – particularly more complex laws regarding state taxes, employer taxes, and any possible tax reductions.
Difficulties
And if you run into any difficulties then you want a CPA on your side. It is possible you may be audited or you may receive a letter from the IRS stating that more information is needed.
Unfortunately, taxation is not always straightforward and these complications can cause further issues for you and your business. To avoid such issues or to resolve them if they come up, you want to consult your CPA.
A CPA will be able to navigate through any challenge you may have. Do not think twice about hiring a CPA to fulfill your business tax obligations.
We also recommend checking out Founder Tax to be alerted of the tax due dates and to keep yourself properly organized.
File Your Taxes
Now that you know the business tax due dates and other tax obligations, you are ready to file your taxes.
Be sure to follow our blog to learn more about business tax obligations and how to run your small business.