Nobody likes doing taxes, but everyone has to. Make sure you know when you and your company need to file them this year.
For individual taxpayers, the tax due date is usually the same each year: April 15th. The only exception is when April 15th falls on a weekend. Then, the IRS typically extends the due date to April 16th or 17th. The same is true for those filing an extension. Extensions are due on October 15th unless that date falls on the weekend. Then it is usually extended to October 16th or 17th. This rule also pertains to holidays. If the filing date falls on a holiday, then everyone gets an extra day or two to file.
Rules for Filing Dates for Business Owners
For business owners, the filing dates are not that simple unless your business is a sole proprietorship or single member LLC. Those filers typically must use the same dates as individual taxpayers. However, business owners may be required to file on other dates depending on several factors.
For business owners, the filing date is affected by what type of business entity it is. That’s because the type of business entity determines the company’s fiscal year. If your business is an S Corporation or an LLC, it is considered a flow-through entity and the taxes are due on the fifteenth day of the third month of the fiscal year, which is commonly March 15th (or March 16th or 17th if there’s a holiday or weekend involved).
The filing date for extensions for an LLC and S Corporation is September 15th, unless that date falls on a weekend or holiday. Then it might be extended to the 16th or 17th.
The tax return for a partnership should be filed on the 15th day of the 3rd month following the end of the company’s tax year. For example, if year-end for your business is December 31st, then the due date for tax filing is March 15th. Remember that these dates will change if the filing date falls on a weekend or holiday. March 15th (16th or 17th) is also the date when the individual partners should receive their Schedule K-1. This document shows each partner’s individual share of income or loss. Partners must have this document in order to file their individual tax returns, which would be due approximately one month later.
Limited Liability Company (LLC) with Multiple Members
Multiple-member LLCs may be taxed as partnerships in some states. If this is true where you live, then the filing dates remain the same as for a partnership. The date for distributing Schedule K-1 to the partners is the same as well or March 15th.
If the LLC ceases to exist, whether the company goes out of business or is moved into a C Corp, it’s important to file a short tax return right away. In most cases, the partners only have three and a half months to file this return. If partners fail to do this, the IRS may charge additional monthly penalties on top of regular tax liability.
In situations where a multiple-member LLC is taxed as an S corporation or regular corporation, the following rules apply:
- Choose the most convenient filing date for your corporation. The only requirement is that owners have not filed a Subchapter S election. Quarter end dates are typically chosen.
- Corporate tax returns are due and payable on the 15th day of the fourth month following the company’s fiscal year.
- For a Subchapter S Corporation, taxes should be filed on the same filing date as the individual owner’s personal tax return. The Schedule K-1 shows the individual income for each owner. S Corporations are most often filed using a calendar end date of December 31st unless the corporation can show a valid reason for changing the date.
Charitable Organizations & Nonprofits
Charitable organizations and other nonprofits must file their taxes on the 15th day of the fifth month after the end of the organization’s fiscal year. In most cases, these organizations must file their taxes by May 15th. Charitable organizations only qualify for three-month extensions instead of six months. So, extensions would be due by August 15th.
Tips for Success
Learning the correct tax dates for filing is one of the big challenges for new business owners. Since the penalties can be exorbitant, many tax experts recommend setting up a tax calendar for your business. You can learn the dates by going online or speaking with an accountant. Some people prefer setting up an actual calendar with the dates circled that they can place somewhere in their office. Others prefer setting up a digital calendar using an app or Google.
This can prevent you from worrying about whether you’ve got some type of quarterly filing coming up soon. Business owners certainly have enough to worry about so solving an important issue like tax filings will relieve some of that stress. After you’ve got your tax calendar set up, ask someone in the know to check it over for you and make sure everything is correct.
Penalties & Interest
Filing your taxes on time and correctly is important for both individuals and companies. If you miss a filing date, penalties and interest begin to accrue immediately. The IRS will make no exceptions to these rules. That’s why it’s so important to know when to file and what forms you should file. If you aren’t confident in your ability to file a business tax return, hire a professional. Because of their expertise and experience, an accountant can often save you more than enough money to pay for their services.
Even if you have a professional accounting service doing your taxes for you, it can be a good idea to double check and make sure everything was filed on time each quarter and year-end. Most accountants will not only notify you, but they will send you copies of what they filed on your behalf.
Remember that filing an extension does give you extra time to pay, but it does not stop interest and fees from accruing.
Reducing your Tax Burden with the Right Strategy
There are so many ways to reduce your tax obligation. All it takes is a bit of strategy and planning. An accountant can recommend the best options to help your business take advantage of perfectly legal strategies. For instance, a 401k can be set up for small business investments, real estate, and hard-money lending. This can allow your company to defer taxes on profits.
Your company can make investments in automobiles, property and other big-ticket items. It can also purchase rental property. In many cases, those with rental property can show losses throughout the year due to property maintenance, interest and other charges. Many company owners hire their spouse and/or children. Though they will need to be assigned an actual job with weekly duties, this can be a powerful tax saving tool.
There are so many other ways for businesses to save money on their taxes each year. Don’t be afraid to discuss every legitimate method with your accountant.