Important Tax Deadlines for Small Businesses

Taxes are an inevitable aspect of running a small business, often representing one of the most complex and daunting challenges for entrepreneurs. While April 15th is probably circled on your calendar as the big tax day, it's certainly not the only important date to remember when it comes to your small business taxes. There are tax deadlines for paperwork filing and payments to make throughout the year for most small business owners. 

Whether you're a seasoned entrepreneur or just starting your small business journey, this guide aims to demystify the complexities of small business taxation, empowering you to make informed decisions and effectively manage your finances. 

To help you plan tax season, our small business accounting firm in Raleigh is sharing information about all the tax deadlines you need to know.

Federal Taxes for Small Businesses

Understanding federal taxes is essential for small business owners to accurately calculate their tax liabilities, ensure compliance with IRS regulations, and avoid penalties.

Income Tax

Small businesses, including sole proprietorships, partnerships, S corporations, and C corporations, are subject to federal income tax. The tax rate varies depending on the business structure and taxable income.

Employment Taxes

These include federal taxes such as Social Security and Medicare taxes (FICA), federal unemployment tax (FUTA), and federal income tax withholding from employee wages.

Self-Employment Tax

Self-employed individuals, such as sole proprietors and independent contractors, are required to pay self-employment tax, which covers Social Security and Medicare taxes similar to FICA taxes for employees.

State Taxes for Small Businesses

Each state has its unique tax laws and regulations, requiring small business owners to navigate a maze of requirements and tax deadlines. 

Income Tax

Most states impose an income tax on businesses, although the rates and structures vary. Some states also levy a franchise tax or a gross receipts tax instead of or in addition to an income tax.

Sales Tax

Small businesses engaged in selling tangible goods or certain services may be required to collect and remit sales tax to the state. The sales tax rate and regulations differ by state.

Payroll Taxes

Similar to federal payroll taxes, state payroll taxes may include unemployment insurance tax, state income tax withholding, and disability insurance tax in states that require it.

Excise Tax

Some states impose excise taxes on specific goods or services, such as gasoline, tobacco, alcohol, or certain types of businesses like gambling or lodging.

Local Taxes for Small Businesses

In addition to federal and state taxes, small businesses may also be subject to various local taxes imposed by cities, counties, or municipalities. Understanding local tax obligations is essential for small business owners to ensure compliance with local tax laws and regulations, avoid penalties, and maintain good standing with local tax authorities. 

Property Tax

Small businesses that own real property, such as land, buildings, or equipment, may be subject to property tax levied by local governments.

Business License Tax

Many cities and counties require businesses to obtain a business license and pay a fee or tax for the privilege of operating within their jurisdiction.

Local Sales Tax

In addition to state sales tax, some municipalities impose local sales taxes on retail transactions within their boundaries.

Annual Tax Deadlines for Small Businesses

For small business owners, staying on top of annual tax deadlines is paramount to maintaining compliance with tax regulations and avoiding penalties. Annual tax deadlines primarily revolve around federal income tax filing and quarterly estimated tax payments. 

Federal Tax Deadlines

Small businesses operating as sole proprietorships, partnerships, S corporations, or C corporations must file their federal income tax returns by the deadline, typically on April 15th of each year. However, if April 15th falls on a weekend or holiday, the deadline may be extended to the next business day.

Small business owners who expect to owe at least $1,000 in federal income tax for the year are generally required to make quarterly estimated tax payments. These payments are due on April 15th, June 15th, September 15th, and January 15th of the following year. Failure to make timely estimated payments by the tax deadlines can result in penalties and interest charges.

State Tax Deadlines

State income tax filing deadlines vary by state but often mirror the federal income tax filing deadline of April 15th. However, some states have different deadlines, so it's essential to check with the state tax authority for specific tax deadlines for your small business. 

Extension Deadlines

Small businesses that need additional time to file their state income tax returns can request an extension. The deadline for filing for a tax extension varies by state but is typically six months from the original due date. It's important to note that an extension to file does not extend the time to pay any taxes owed.

Quarterly Tax Deadlines for Small Business Owners

Quarterly tax deadlines are important milestones for small business owners, requiring them to make estimated tax payments to cover their federal income tax liabilities. Understanding and adhering to these tax deadlines is crucial for avoiding penalties and ensuring compliance with tax regulations. 

Quarterly estimated tax payments are required for small business owners who anticipate owing at least $1,000 in federal income tax for the year after accounting for withholding and refundable credits. These payments are designed to spread out the tax liability over the year, helping small business owners avoid large tax bills at the end of the year.

The tax deadlines for estimated quarterly tax payments are: 

• April 15th: The first quarterly estimated tax payment for the year is due on April 15th. This payment covers income earned from January 1st to March 31st.
• June 15th: The second quarterly estimated tax payment is due on June 15th and covers income earned from April 1st to May 31st.
• September 15th: The third quarterly estimated tax payment is due on September 15th and covers income earned from June 1st to August 31st.
• January 15th (of the following year): The fourth and final quarterly estimated tax payment is due on January 15th of the following year, covering income earned from September 1st to December 31st of the previous year.

Consequences of Missing Quarterly Tax Deadlines

Failure to make timely quarterly estimated tax payments can result in penalties and interest charges assessed by the IRS. These penalties are calculated based on the amount of underpayment and the length of time it remains unpaid. Missing quarterly tax deadlines is one of the common tax filing mistakes that can lead to cash flow challenges for small businesses, as they may be required to pay a large tax bill at the end of the year, along with penalties and interest.

Small Business Payroll Tax Deadlines

Payroll tax deadlines are critical for small businesses with employees, as they involve withholding and remitting various taxes on behalf of their employees. Failure to meet these deadlines can result in penalties and interest charges. Here's what small business owners need to know about payroll tax deadlines.

Filing Form 941 for Federal Taxes

Form 941, the Employer's Quarterly Federal Tax Return, must be filed by small businesses quarterly to report income taxes withheld from employees' wages, as well as Social Security and Medicare taxes (FICA). The deadlines for filing Form 941 are typically the last day of the month following the end of each calendar quarter (April 30th, July 31st, October 31st, and January 31st).

Depositing Federal Payroll Taxes

Federal payroll taxes withheld from employees' wages, including federal income tax withholding, Social Security tax, and Medicare tax, must be deposited with the IRS regularly. The frequency of tax deposits depends on the size of the employer's payroll and is determined by the IRS deposit schedule. When working with a small business tax prep accountant, they can help determine the appropriate deposit schedules for your small business payroll taxes. 

Withholding and Reporting State Income Tax

State payroll tax deadlines vary by state but generally require small businesses to withhold state income tax from employees' wages and report these taxes to the state tax authority periodically. The frequency of reporting and depositing state payroll taxes depends on state regulations. When collaborating with a tax preparation accountant for small business tax filing, they can assist in establishing the optimal reporting and depositing schedules tailored to your small business payroll tax requirements.

Unemployment Insurance Tax for State Filing

State unemployment insurance tax must be reported and paid to the state unemployment agency according to the agency's specified deadlines. Failure to meet these tax deadlines can result in penalties and affect the employer's experience rating for unemployment insurance purposes.

Consequences of Missing Payroll Tax Deadlines

Failure to meet payroll tax deadlines can result in penalties and interest charges assessed by federal and state tax authorities. These penalties are typically calculated based on the amount of underpayment and the length of time it remains unpaid. Persistent failure to comply with payroll tax obligations can lead to more severe consequences, including legal action by tax authorities, liens on business assets, and even criminal penalties in extreme cases.

Small Business Sales Tax Deadlines

Sales tax deadlines are crucial for small businesses engaged in selling tangible goods or certain services, as they involve collecting and remitting sales tax to the appropriate tax authorities. Failure to meet these deadlines can result in penalties and interest charges. Here's what small business owners need to know about sales tax deadlines.

Sales Tax Obligations for Small Business Owners

Small businesses are typically required to collect sales tax from customers at the point of sale for taxable goods or services. The sales tax rate and taxable items vary by state and even by locality, so small business owners need to understand their specific sales tax obligations. After collecting sales tax from customers, small businesses must remit these taxes to the appropriate tax authority according to the designated deadlines. Your tax prep CPA can ensure you know the sales tax deadlines for your state. 

Sales Tax Filing Deadlines

The frequency of sales tax filing varies by state and depends on factors such as sales volume and business location. Some states require monthly, quarterly, or annual sales tax filings, while others may have different filing frequencies. Sales tax filing deadlines typically fall at the end of the reporting period, which could be monthly, quarterly, or annually. Small business owners need to know their state's specific sales tax filing deadlines and ensure timely compliance.

Consequences of Missing Sales Tax Deadlines

Failure to meet sales tax deadlines can result in penalties and interest charges assessed by state tax authorities. These penalties are typically calculated based on the amount of underpayment and the length of time it remains unpaid. Persistent failure to comply with sales tax obligations can lead to the loss of good standing with state tax authorities, potentially resulting in legal consequences and business disruptions.

Other Important Tax Deadlines for Small Businesses

While income tax, payroll tax, and sales tax deadlines are among the most critical for small businesses, there are several other important tax deadlines that business owners should be aware of. These deadlines cover various tax obligations and reporting requirements and can have significant consequences if not met. 

Excise Tax Deadlines

Small businesses engaged in specific activities or industries may be subject to excise taxes on certain goods or services, such as gasoline, tobacco, alcohol, or air transportation. Excise tax reporting deadlines vary depending on the type of excise tax and the frequency of required reporting. Excise taxes are typically due shortly after the end of the reporting period, with specific payment deadlines determined by the IRS or other applicable tax authorities.

Retirement Plan Tax Deadlines

Small businesses that offer retirement plans, such as 401(k) or IRA plans, may have deadlines for making employer contributions and employee salary deferrals. These deadlines are usually specified in the plan documents and may vary depending on the type of retirement plan.

Reporting Deadlines

Small businesses sponsoring retirement plans are required to file annual reports, such as Form 5500, with the IRS and the Department of Labor. The deadline for filing these reports is typically the last day of the seventh month after the plan year ends, with the option for an extension.

Form W-2 Reporting 

Form W-2 is a crucial document for small businesses with employees, reporting wages, tips, and taxes withheld. Employers must accurately report employee information, including wages and tax withholding, and distribute Form W-2 to employees by January 31st while filing copies with the IRS by the last day of February (or March if filing electronically). 

Noncompliance may result in penalties, making it essential for small business owners to ensure accurate and timely Form W-2 reporting to maintain compliance with IRS regulations. Utilizing payroll software or working with a small business CPA can help streamline the reporting process and reduce the risk of errors or missed tax deadlines.

Form 1099 Reporting

Small businesses that make certain payments to vendors, contractors, or other individuals must report these payments to the IRS using Form 1099. Form 1099 must be available to recipients on January 31st of the following year, while the deadline for filing Form 1099 with the IRS is typically the last day of February (or the last day of March if filing electronically).

Other Information Reporting

Small businesses may also have other information reporting requirements, such as filing Form 1095 for health insurance coverage or reporting foreign financial accounts using Form FinCEN 114 (FBAR). These reporting deadlines vary depending on the specific reporting requirement and should be carefully monitored. To avoid missing important tax deadlines and reporting schedules, working with a certified public accountant who understands small business reporting procedures is vital. 

Tips for Meeting Tax Deadlines

Meeting tax deadlines is essential for small business owners to avoid penalties and maintain compliance with tax regulations. Here are some tips to help you stay organized and meet your tax deadlines effectively.

Use a Calendar

Keep track of tax deadlines using a digital or physical calendar. Mark important dates such as income tax filing deadlines, estimated tax payment deadlines, and payroll tax deposit deadlines well in advance to ensure timely preparation and submission of required documents.

Establish a Tax Filing System

Develop a systematic approach to organizing your tax documents and records throughout the year. Create folders or digital files for different types of tax documents, such as income statements, expense receipts, and payroll records, to facilitate easy retrieval when it's time to prepare and file your taxes.

Work with Tax Professionals

Consider meeting with a small business tax accountant to assist you with tax planning and preparation. A qualified tax professional can provide valuable guidance on tax strategies, ensure compliance with tax laws and regulations, and help you maximize deductions and credits to minimize your tax liability.

Monitor Changes in Tax Laws

Stay informed about changes in tax laws and regulations that may affect your business. Regularly review IRS publications, tax updates, and guidance from tax authorities to ensure you're aware of any changes that could impact your tax obligations and deadlines.

Outsource Your Tax Filing Needs to Our Small Business CPAs in Raleigh 

Don't let tax deadlines become a source of stress for your small business. Partner with our team of Raleigh CPAs to ensure your business taxes are filed on time. With our personalized approach to tax planning and preparation, we'll help you stay organized and compliant.

Contact C.E. Thorn, CPA, PLLC, today to learn more about how we can help your small business with tax filing and preparation. Call us at  919-420-0092 or fill out the form below to inquire about our tax preparation services.