Your business needs to plan for the tax calendar and adhere to IRS tax deadlines, or you risk severe penalties and fines. Running a growing business is a full-time job, so many business owners put taxes on the back burner until a tax deadline starts drawing near. However, it’s better to stay on top of your taxes all year. Start by planning for these crucial tax deadlines for online vendors.
Preparing for the Tax Calendar
The best way to prepare for tax deadlines is to stay organized, and utilizing proper technology can make this continuous effort much more manageable.
For example, many bookkeeping apps have features to help you track expenses. You need to keep expense information on file so you can support any deductions you claim on your tax return. Using these apps to automatically catalog and track expenses as they come in will make it much easier to organize everything when the tax deadline comes. Many of these apps even connect with popular accounting software, allowing you to automate an even larger part of your bookkeeping workflow.
When it comes to taxes, staying organized is the name of the game. Use whatever means necessary to keep your books organized and accurate to avoid running into problems down the road.
Primary Filing Deadline: April 15
The government expects most taxpayers and businesses to submit their tax returns by April 15. This date marks the primary deadline for most people, and many companies plan their tax calendars around this date. The IRS expects you to file and pay your taxes by this date unless you request an extension.
If you miss the deadline, you could face a 5% penalty for failing to file your taxes. The IRS also imposes a 0.5% penalty for each month tax payments are past due, with a maximum fine of 25%.
You must cover your full tax bill by this date unless you request a payment plan. However, the IRS can still charge interest on late payments, so it’s best to pay your taxes by April 15, if possible.
Extended Tax Deadline: October 15
October 15 is the deadline for taxpayers who request an automatic extension. You must file your return before this deadline or risk a ‘failure to pay’ penalty.
Corporate Tax Deadlines:
There are several different tax deadlines for corporations, and they vary based on the business structure. These are some of the most common entity structures and their corresponding deadlines.
S-Corp Filing Deadline
S-corps must file Form 1122S on or before March 15. This form outlines pertinent information about the S-corp, including income, deductions, and dividend payments to shareholders. Form 1122S and other similar tax forms are often referred to as consolidated returns.
C-Corp Filing Deadline
C corporations file their annual taxes using Form 1120, U.S. Corporation Income Tax Return. This form asks for standard information similar to other types of tax return forms.
Filing deadlines for traditional corporations vary depending on the companies fiscal calendar. According to IRS.gov, “Generally, a corporation must file its income tax return by the 15th day of the 4th month after the end of its tax year.”
For most small businesses that file as corporations, that translates to April 15th. However, if your company uses a different fiscal calendar, the date could change. For example, a C-corp whose fiscal year ends March 31 might not have to file Form 1120 until August 15.
Other Business Entities
Partnerships must also file Form 1065 on or before the March 15 tax deadline. This form reports similar information as other consolidated returns like Form 1122S, like profits, losses, and more.
If you can’t file by March 15, you must file an extension request before the deadline. An extension can postpone the filing deadline by six months, so you must submit your return by the extended deadline date of September 15.
Limited Liability Companies (LLC)
An LLC is a pass-through entity, so any business income flows directly onto its owners’ tax returns. As a result, single-member LLCs follow the tax calendar of their respective owner members. The IRS usually treats multi-member LLCs as partnerships for tax purposes, so these companies usually submit Form 1065, U.S. Return of Partnership Income.
Automatic Tax Extensions and Payment Plans
If you think you might miss the deadline, you can buy yourself some time by filing a tax extension. The approval process is automatic, but you must file the necessary paperwork before the tax deadline passes.
Filing a tax extension gives you an additional six months to pay, pushing the filing deadline back until October 15. However, it doesn’t postpone the payment deadline, so you still need to pay your tax bill by April 15.
If you can’t pay your tax bill, you should set up an IRS payment plan. Requesting a payment plan allows you to pay your taxes in installments, making the financial burden more manageable. However, you will most likely have to pay some form of interest if the payment plan is long-term, and the IRS charges setup fees for some of these arrangements.
Estimated Tax Deadlines:
If your business owes more than $1,000 in taxes, the IRS expects you to make advanced payments on your estimated tax bill. Estimated tax payments are due four times per year, with one installment scheduled per fiscal quarter.
Quarterly Tax Due Dates
It is vital to keep track of when quarterly tax payments are due. Quarterly tax deadlines fall on the following dates:
Best Practices for Tax Time
One of the best ways you can prepare for your tax deadlines is to stay on top of your books. Make your bookkeeping a priority. If you find yourself falling behind, schedule a set time to manage your books. If you still can’t handle it, you should consider hiring outside help. You can’t afford to let your bookkeeping tasks slide to the wayside.
Pay Your Taxes Online
Paying your taxes online can also save you lots of time. The IRS offers several different online payment methods, and their system has some helpful features. You can pay your taxes via ACH transfer, credit cards, debit cards, and more. Plus, you can schedule payments in advance to save you even more time.
Your business should save for its tax bill all year round. Anytime money comes into the company, you should set aside some of the funds to cover the appropriate taxes.
We recommend saving 30% of your income in a dedicated tax savings account. Building a tax savings cushion in advance will ensure you have the money you need to meet your obligations. Having this cash on hand could save you thousands of dollars in potential penalties and interest, so maintaining a savings account is crucial for any growing business.
Get Tax Help Now
Are you behind schedule on your tax calendar? The next tax deadline is closing fast. Talk to a Tax Hack eCommerce tax pro today to ensure your business doesn’t get left behind.