One of the first things you learn as a small business owner is that you have many more tax obligations than you do as a private citizen. Even if it’s your first year in business, the Internal Revenue Service (IRS) expects you to know and abide by all tax deadlines. This goes for state taxes as well. Below are some of the most important tax deadlines to remember.
April 15 Tax Filing Deadline Extended to July 15 for 2020
You need to file an annual tax return for your business unless its filing status is a partnership. In that case, you would file an information report instead and each partner would report his or her profits and losses on a personal income tax form. Annual tax returns are normally due by April 15 unless that date falls on a weekend or holiday. It would fall on the following Monday in that situation. However, the federal government has extended the deadline until July 15 in the wake of the worldwide coronavirus crisis and the impact it has had on the American economy.
Some exceptions exist to the April 15 filing deadline. Limited liability companies with two or more employees and calendar-year partnerships, for example, must file by March 15 each year. This is also true of S corporations. As that date has already passed, the IRS has not announced any adjustments due to the health crisis.
Employment Taxes
You need to remit employment taxes if your business has employees. This requires you to withhold the correct amount of federal and state tax from every employee’s paycheck and submit it to the correct taxing authority. With Medicare and Social Security, you will need to match the withdrawal with an employer contribution. The remaining employment taxes due for 2020 are April 30, July 31, and November 2 along with February 1, 2021.
While you don’t need to withhold any taxes for independent contractors, you do need to issue them a miscellaneous income 1099 form if they earned more than $600 in a calendar year from your company.
Quarterly Estimated Tax Payments
If you’re the shareholder of an S corporation, are a legal business partnership, or a sole proprietor, you must make estimated quarterly tax payments on April 15, June 15, and September 15, 2020, as well as January 15, 2021, for the 2020 filing year. You will also need to do this at the state level if the state where you operate your business collects income tax.
Anyone who expects to owe more than $500 at the end of the calendar year must make these quarterly payments. You can print coupons and mail a check or pay online using the Electronic Federal Tax Payment System.
Like the federal tax filing deadline, the due date for first-quarter estimated payments is now July 15 rather than April 15 for 2020. The IRS has not yet made any coronavirus-related updates for second and subsequent quarter payments.
Self-Employment Taxes
You should include this in your quarterly estimated tax payments to cover your own social security and Medicare benefits. This applies to all self-employed individuals who expect to owe more than $1,000 at the end of the calendar year. If you are uncertain how to determine how much you own, don’t hesitate to schedule an appointment with Capital Business Strategies.
Learn More About Small Business Tax Obligations
With all that you must learn as a new small business owner, your tax deadlines and obligations can seem like they’re only adding to your stress. Arranging services with Capital Business Strategies will help you stay on task. Please contact us to schedule your first appointment today.