Staying on top of constantly shifting IRS mandates and forms is challenging amidst the fray of running a business. But whether you’re a startup or an established player, a proactive grip on your business tax deadline is essential to sidestepping penalties and harnessing potential savings. With the right information and foresight, you can conquer compliance come tax day.
Business Tax Deadlines
Meeting business tax deadlines— from income tax returns to estimated quarterly payments—is no small feat. The repercussions of overlooking these crucial dates can lead your business down a slippery slope towards penalties and interest charges that could have been avoided with better planning.
Your tax deadline will depend on your business type.
Sole Proprietorship: A Unique Scenario
If you’re a sole proprietor, bear in mind that your personal taxes are intertwined with those of your business. Business owners will file their tax return with the IRS on Form 1040 with Schedule C by April 15 of each year to report income. This date, however, may change if it falls on a weekend of holiday.
Partnership & Multi-Member LLC Tax Deadlines
Partnerships, including those classified as multi-member LLCs, file their annual returns on Form 1065. It’s required to be filed annually by March 15. This form plays a crucial role in determining partnership tax based upon profit distribution among partners.
S Corp and C Corp Taxes Deadlines
C corporations that follow a calendar year fiscal cycle need to file their Form 1120 submission by April 15 annually. S corporations have only until March 15 to submit their Form 1120S. Staying alert and planning for filing and payment due dates will help avoid an unnecessary rush.
The Impact of Fiscal Year on Business Tax Deadlines
When it comes to tax deadlines, the fiscal year you operate under plays a pivotal role. Your choice between operating on a calendar year or an alternate fiscal year can significantly influence your company’s tax schedule.
A calendar year, spanning from January through December, is typically adopted by most businesses for its simplicity and alignment with personal taxes.
Fiscal Years: A Different Approach
In contrast, some companies may choose to follow a different 12-month cycle ending in any month other than December. This is known as their fiscal year. The flexibility often caters to specific operational cycles or industry practices.
Your decision will directly impact when your corporation’s taxes are due. For instance, corporations that abide by the calendar year must file their returns before April 15 every subsequent year, while those who chose alternative end dates have three months after the closure date to submit their returns.
To make sound decisions regarding your company’s financial obligations, consider factors like cash flow patterns and seasonal variations in income and expenses, along with specific industry norms.
Managing Your Estimated Quarterly Taxes
To compute your predicted tax payment sum precisely, you must take into account both the expected adjusted gross income (AGI) and taxable income for the year, as well as any deductions or credits that may be applicable. Divide that figure by the four quarters for the first payment. For subsequent payments, revise the numbers based on your business’s actual performance to avoid over or under paying your tax obligation.
Filing Deadlines For Your Estimated Taxes
Those who anticipate owing $1,000 or more when submitting their annual return must make estimated quarterly payments throughout the fiscal year. These come into play at specific intervals:
- April 15 (Q1)
- June 15 (Q2)
- September 15 (Q3)
- January 15 (Q4)
Anticipating Future Business Tax Deadlines
The tax landscape is constantly changing, and scheduling deadlines on your checklist is helpful to avoid penalties.
Ace your tax planning with these strategic measures:
- Set up reminders leading up to every significant date.
- Ensure all source documents are available in order to prepare your returns timely.
- Earmark funds specifically for taxation purposes well before they’re due.
What Happens If You Miss a Business Tax Deadline?
The IRS is stringent about deadlines and imposes significant penalties for tardiness. Late fees—the initial consequence—are calculated as a percentage of your unpaid taxes. These charges accumulate at five percent per month on any outstanding amount, up to a maximum penalty of 25 percent.
Besides late fees, businesses also face interest charges. Interest starts accruing from the day after the tax is due until it is fully paid off. Just like individual taxpayers’ interest rates that change quarterly and compound daily, businesses too have similar rules applied.
Additional repercussions such as liens against property or even criminal prosecution may arise with consistent failure in meeting deadlines.
How can you stay prepared?
- Maintain complete records to aid in faster tax filing and preparation.
- Stay updated on tax changes, from deadlines to rates, to avoid compliance issues.
- If you’re unable to pay the full amount, file anyway. This will help to avoid late filing penalties.
Get Professional Help For Your Business Taxes
Business taxes can seem overwhelming. However, with the right guidance from business and corporate tax professionals, it is more than manageable.
Business tax experts bring in-depth knowledge about income tax returns and estimated quarterly payments to ensure IRS compliance while maximizing available deductions and credits. They stay updated on all changes in regulations—something that might not be feasible for businesses given their operational demands.
Beyond just filing returns, they also provide strategic advice for future fiscal planning
When finding a tax expert to help you meet your business tax deadline, consider factors such as experience level, specialization area, pricing structure and industry expertise. At Paro, we help businesses navigate their compliance responsibilities and avoid unnecessary penalties. Match with a tax preparer, enrolled agent or CPA in hours, rather than weeks, and kickstart your tax filing with ease.
