It’s a time of the year which not many business owners look forward to, but one which you must be aware of. The tax season for Americans is coming to an end, which means the deadlines for specific tax returns are looming on the horizon.
When you own a small business, unfortunately, being aware of this necessity falls on your shoulders. No longer can you rely on an employer to arrange, prepare, and file business taxes for you; rather, this is a job you need to complete yourself. When you are compiling the documents you need to submit your tax returns, you also need to bear in mind the different deadline dates, and what each one means for your business specifically.
While some deadlines have already passed us by, the following are certainly worth noting down to ensure you don’t miss any crucial dates.
Monday 15th April
Let’s start with the most critical date to remember. Monday 15th April is the big deadline for a number of tax returns, including:
- Individual tax returns: Form 1040, 1040A, or 1040EZ
- Sole proprietors filing Schedule C
- Corporation tax returns: Form 1120
- Estate income tax/trust income tax returns: Form 1040
What makes 15th April so significant is that it is also the deadline for the first quarterly payments. If your business opts to pay taxes quarterly rather than yearly, April signifies the first quarter in the year.
Additionally, this is the last date when you can make a contribution to one of the following for the 2018 tax year:
- Traditional IRA
- Roth IRA
- Health Savings Account
- Solo 401(K)
However, that’s not all which is significant about this date. If your small business requires an extension before you can file your tax return, perhaps you need to prepare further documents, this is the date when you can request an extension. You can do so by downloading the Form 4868, and it gives you an extra six months before you need to file your return.
Remember: Even if you request an extension, you will still need to pay your taxes on this date. You must submit your tax payments, along with the extension form on 15th April.
The Form 1099-MISC Copy A deadline is quickly approaching, but what does it mean for small businesses, and why should you take note of it?
For small businesses who work with small, independent contractors, for example, freelance contractors, you have until this date to file form 1099-MISC Copy A, providing you do not have amounts in Box 7. For each person you paid at least $600 in a variety of circumstances, including services performed, payments to an attorney, or other income payments, you need to complete this specific form.
Remember: This deadline applies to paper filing. Those who are filing electronically have until 1st April.
For businesses who are separate from the owners in regards to income tax, March 15th is the date to return your corporate taxes. As the business is seen as a separate entity from the business owners (most often seen with shareholder corporations), the owners do not pay the taxes for the company. It also means, however, that the income tax rate is paid at the corporate rate, not the personal tax rate. The deadline is also applicable to corporations who want to request an additional six-month extension to file their tax returns.
To file for this specific tax return, you can do so using Form 1120, 1120-A, and 1120-S.
What’s more, this deadline also applies to partnership tax returns, via Form 1065, or to request an extension for five months to file partnership tax returns.
Financial institutions who must report balances in an individual retirement account, this is the deadline to send out Form 5498 to ensure you report balances correctly and accurately.
For the businesses who chose to pay their taxes quarterly, June 17th is the deadline for the second quarter.
The IRS does require US citizens who are living abroad to file individual tax returns. Therefore, this is a date to remember for those living overseas to file their tax returns, or alternatively, file for an automatic four-month extension, using Form 4868.
Again, for those businesses paying their taxes quarterly, this particular date in September is for the third quarter payments.
Additionally, September 16th is the final deadline for corporation tax returns, if an extension was requested and granted. Therefore, corporations must have Form 1120, 1120-A and 1120-S fully prepared and ready to file. Unfortunately, there will be no further extensions available, and corporations missing this deadline can face hefty penalties and fines for doing so.
For self-employed workers, October 1st signifies the deadline to establish a Savings Incentive Match Plan for Employees Individual Retirement Account (SIMPLE IRA).
What this means is by this deadline, those who are self-employed or an employer who has fewer than 100 employees, must have set up a retirement plan.
Keep this date in mind, especially for individual tax returns!
October 15th is the final extended deadline for those who are filing individual tax returns. This is the very last day the IRS will accept a filed tax return electronically. For those who choose to file after this date, you will be required to mail your tax return.
Additionally, this is also the final deadline to fund a solo 401(k) for the tax year.
What if I Miss a Date?
If you miss a deadline, the IRS requires you to file your return as soon as possible. Unfortunately, you will probably face a financial penalty for doing so. However, the IRS will accept your return (and your money), and that will be the end of the process unless your return or money runs into further problems.
What is crucial to remember is what to do if you cannot pay the tax your business and yourself personally owe. If you cannot pay, you must file your tax return regardless, but you must also immediately apply for an installment agreement. Luckily, the IRS is generous to those who are upfront about their payments and will agree to let you pay over an arranged amount of time.