2022-2023 Tax Deadlines for Businesses
Tax season is upon us. Depending on the structure, businesses must follow a different set of tax deadlines than individuals. Read on to learn more about the tax deadlines for each business structure.
Federal Business Tax Deadlines
Normally, April 15th is Tax Day - the deadline to file all taxes, individual as well as business. However, this year April 15th is on a Saturday, and the following business day, April 17th, is recognized as a holiday in Washington, D.C. That makes April 18th the official deadline for most Americans, including business owners, to file taxes with the IRS in 2023. Here are some key tax deadlines for businesses, based on how the organization is structured:
- Sole proprietorships: Schedule C and personal tax return (IRS Form 1040) due April 18, 2023.
- Partnerships: IRS Form 1065 due March 15, 2023.
- Multimember LLCs: IRS Form 1065 due March 15, 2023.
- S-corporations: IRS Form 1120S due March 15, 2023.
- C-corporations: IRS Form 1120 due April 18, 2023.
Business Tax Extension Deadlines
Unfortunately, despite the best effort to be prepared, the business tax filing deadline can creep up on even the most punctual of business owners. Perhaps you are still gathering the essential information and documents needed to file business taxes, or you are unsure about which tax deductions apply to your business. Either way, an extension on the filing of business taxes can be requested.
What is a Tax Extension?
Tax extensions grant an individual or business owner extra time to file their taxes with the IRS without incurring any penalties. Keep in mind, a tax extension is not an opportunity to delay tax payments to the government. Instead, it gives you time to get any paperwork in order. When requesting a tax extension, you must still pay your estimated tax payments.
How to File a Business Tax Extension
Keep the following steps in mind when requesting a tax extension:
1. Submit the tax extension paperwork before your filing deadline. The filing deadline for your tax return depends on your business type:
- S-corporation: tax return is due the 15th day of the third month after the end of the tax year.
- C-corporation: tax return is due the 15th day of the fourth month after the end of the tax year.
- Partnership or LLC, taxed as a partnership: tax return is due on March 15 following the tax year.
- Schedule C, sole proprietorship: extension for your individual tax return, of which your Schedule C is a part, is due on April 15 following the tax year.
All tax filing deadlines are extended to the following business day when they land on a weekend or legal holiday.
2. Submit your estimated tax payments with your tax extension. The form you use to file an extension is as follows:
- Schedule C, sole proprietorship: If your business is a sole proprietorship, you can file for an extension for personal income taxes, including Schedule C, with IRS Form 4868. You can also file IRS Form 4868 for a single-member limited liability company (LLC) filed on Schedule C.
- Other businesses: Corporations, LLCs, and other businesses use IRS Form 7004 to request a filing extension.
3. File your tax extension forms electronically or via regular mail.
4. Only one extension is granted by the IRS.
Pros and Cons of Filing a Tax Extension
Before filing a tax extension, consider the below pros and cons:
The pros of filing a tax extension are:
- You have more time to file. Additional time is critical if you can’t get your documentation together in time to file by the original due date. If you miss crucial deductions and other tax items by filing before you’re ready, you should file for an extension.
- You avoid late filing penalties. An extension grants you extra time to file without incurring expensive penalties.
The cons of filing a tax extension are:
- You must still pay. You must estimate your taxes due and pay or risk penalties for late payments. By the time you do the work to make a reliable estimate, you may be close to completing your tax return anyway.
- Extra time doesn’t necessarily make taxes easier. Completing your tax return does not become easier later. It may even become harder to remember deductions and other essential items months later.
- It may be better to amend your return later. If you’re unsure about a tax item — for example, if you think more deductions are possible — you can still file your return on time and file to amend your return later if necessary.
Estimated Tax Payments Deadlines
The IRS requires some businesses to make estimated tax payments on a quarterly basis, including the following: corporations expected to owe more than $500 in taxes; sole proprietors, partners, and S corporations expected to owe more than $1,000 in taxes.
If this is your business, here are the estimated tax payment deadlines:
- Quarter 1 (January 1 to March 31) estimated tax payments are due on April 15.
- Quarter 2 (April 1 to May 31) estimated tax payments are due on June 15.
- Quarter 3 (June 1 to August 31) estimated tax payments are due on September 15.
- Quarter 4 (September 1 to December 31) estimated tax payments are due on January 15 of the following year.
Keep in mind, the IRS charges penalties for underpayment and late payment of taxes, including penalties assessed for estimated tax payments that should have been made.
Employment Tax Deadlines
The Federal Unemployment Tax Act (FUTA), along with state unemployment systems, provides unemployment payments to workers who lost their jobs. Most employers pay both Federal and state unemployment taxes.
- If your FUTA tax liability is more than $500 for the calendar year: At least one quarterly payment must be made by the last day of the month after the end of the quarter.
- If your total FUTA tax liability for the year is $500 or less: The tax liability amount can be deposited or the taxes can be paid with Form 940 by January 31st.
- If your FUTA tax liability is $500 or less in a quarter: Carry it forward to the next quarter or until the cumulative FUTA tax liability is more than $500.
The "Employer's Quarterly Federal Tax Return" form, known as IRS Form 941, is used for two primary reasons: to report income taxes, Social Security tax, or Medicare tax withheld from employee's paychecks, and, to pay the employer's portion of Social Security or Medicare tax.
- Quarter 4 taxes for the prior year are due on January 31.
- Quarter 1 taxes are due on May 1.
- Quarter 2 taxes are due on July 31.
- Quarter 3 taxes are due on October 31.
Some employers with small payrolls can file the “Employer's Annual Federal Tax Return” form, or IRS Form 944, which is generally due on January 31st of the following year, once a year, instead of form 941 quarterly if their annual employment tax liability is $1,000 or less.
Employee and Contractor Tax Forms Deadlines
In addition to deadlines for filing business taxes, there are also deadlines for sending out tax forms to employees and contractors.
- The deadline to file W-2s for full-time employees is January 31st. W-2s can be sent via regular mail, electronically through email, or provided via an employee portal. Submitting these forms late can result in penalties from the IRS, ranging from $50 to $580 per employee.
- The deadline to file IRS Form 1099-NEC for contract employees is also January 31st. The same penalties and deadlines that W-2s follow also apply to 1099s.