As we approach the new tax season, many of our clients who are small business owners are asking more & more questions. Getting your taxes filed on time is a lot easier when you a) have a year-round accounting system and b) have a clear deadline to aim for. By outsourcing your business’s accounting and taxes with Tameka’s Taxes LLC, you’re covered on both fronts. In the article, we’ll focus on the latter to help all business owners build a 2019 business tax calendar to keep up with filing responsibilities and avoid late penalties.
Using an Alternative Fiscal Year? Don’t miss this:
For the purpose of this article, we’ve used the calendar year (January 1 through December 31). If your business uses another fiscal year, jump down to the bottom of this article to see how to adjust your tax calendar accordingly.
When are 2019 business taxes due in 2020?
Using your entity type, you can identify what your deadline is for filing business taxes and what it would be if you elect to take advantage of the extension, but you’ll also need to take weekends and federal holidays into account.
The table below covers when each type of business entity needs to file 2019 taxes in 2020 (using the calendar year):
|2020 Tax Deadlines for Filing 2019 Business Returns|
|Partnership Tax Deadlines:||Due Date:|
|Original tax deadline for partnerships (Form 1065)||March 16, 2020|
|Extension tax deadline for partnerships (Form 1065)||September 15, 2020|
|S Corporation Tax Deadlines:||Due Date:|
|Original tax deadline for S Corporations (Form 1120S)||March 16, 2020|
|Extension tax deadline for S Corporations (Form 1120S)||September 15, 2020|
|C Corporation Tax Deadlines:||Due Date:|
|Original tax deadline for C Corporations (Form 1120)||April 15, 2020|
|Extension tax deadline for C Corporations (Form 1120)||October 15, 2020|
|Sole Proprietor Tax Deadlines:||Due Date:|
|Original tax deadline for sole proprietors and individuals (Form 1040)||April 15, 2020|
|Extension tax deadline for sole proprietors and individuals (Form 1040)||October 15, 2020|
|Nonprofit Tax Deadlines:||Due Date:|
|Original tax deadline for exempt organizations (Form 990)||May 15, 2020|
|Extension tax deadline for exempt organizations (Form 990)||November 16, 2020|
What Flow-Through Entities (S Corps or Partnerships) Need to Do By Their Tax Deadline
Entities—like S Corps and Partnerships—get the name “flow-through” or “pass-through” because they do not pay income tax. As a flow-through, your business’s income and losses get passed on to the partners, owners, and shareholders. So when your flow-through entity files a Form 1065 to the IRS, you must also issue Schedule K-1s to each partner or shareholder for them to report on their individual returns. For this reason, if you plan on electing to extend your tax deadline, be sure and let all partners and shareholders know so they can do the same!
What Individuals and C Corps Need to Do By Their Tax Deadline
As an individual (including sole proprietors) or corporation, your taxes are due on the fifteenth day of the fourth month of your fiscal year or the fifteenth day of the tenth month if you file an extension. This means you will file your taxes or an extension on April 15, 2020, and pay any tax liability you owe. If you ask for an extension, you will file taxes by October 15, 2020, but you will still need to pay taxes by April 15.
What Exempt Organizations (Nonprofits and Charities) Need to Do By Their Tax Deadline
Exempt organizations, such as a nonprofit or charity, file taxes on the fifteenth day of the fifth month of your fiscal year or the fifteenth day of the eleventh month if you file an extension. For your 2019 return, you’ll need to file your taxes or an extension by May 15, 2020. If you ask for an extension, you will have until November 16, 2020, to file your return, as the fifteenth falls on a Sunday in 2020.
When to Consider the Tax Extension for Your 2019 Business Taxes
Need extra time to get organized? Did something disruptive from your personal life take priority? Did your 2019 business activities have way more tax consequences than you expected? Extending your return deadline doesn’t need to be a stressful decision, in fact, it should help eliminate stress!
C Corporations, Partnerships, and S Corporations use Form 7004 to request a 6-month extension; individuals use Form 4868. For nonprofits, you can request a 6-month extension using Form 8868.
Before you make any decisions, be sure to talk about it with your tax preparer. They may have a reason not to extend. And remember, an extension only applies to the deadline for filing your return, NOT paying the taxes you’ll owe.
When are 2019 estimated quarterly tax payments due for profitable businesses?
For a profitable business, you’re responsible for paying tax on income in quarterly installments due by the fifteenth day of the fourth, sixth, ninth, and twelfth* months of the year (see IRS Form 1120-W). If you miss your estimated tax payments, you can always pay them in full when you go to file at the end of the year, but expect also to pay interest and penalties on what you owe.
|2020 Estimated Tax Payment Due Dates (Calendar Year):|
|Quarterly Deadline:||Due Date:|
|First Quarter Tax Estimate Deadline||April 15, 2020|
|Second Quarter Tax Estimate Deadline||June 15, 2020|
|Third Quarter Tax Estimate Deadline||September 15, 2020|
|Fourth Quarter Tax Estimate Deadline (Corporations)||December 15, 2020|
|Fourth Quarter Tax Estimate Deadline (Individuals)||January 15, 2021|
Other Things to Consider When Filing Your 2019 Taxes:
Did your business have any foreign relationships or activities during 2019?
If you have business relationships overseas, missing the filing deadline just got even more pricey. With the 2017 Tax Act laws that went into effect, failing to file a complete and correct Form 5472 for all of your foreign shareholders now carries a $25,000 penalty per required shareholder per month—yikes.
Did you start or stop your business during 2019?
While it might be tempting to forget about taxes in the first and last year of your business, or as a seasonal business that only exists for a portion of the year, we want to remind you that you’ll still need to file under a short year return.
If you start a business in 2019, you’ll need to file taxes beginning on the date of incorporation through the end of the year. Talk to a tax expert to determine what can and cannot be deducted. For example, the costs you incurred before you started your business won’t be deductible, but you may find you’re able to capitalize and deduct those costs over the next 15 years.
If you shut down your business in 2019, take note of the exact date you close your doors for tax purposes. You’ll need to file a return that includes all income and expenses up to the dissolution date. All that should remain in any business accounts after the doors close are the amounts that you plan to distribute to investors as you cash out and whatever you’ve set aside for paying any final tax liability.
Did you convert your LLC into a C Corp in 2019?
When converting a business from an LLC to a C Corporation, it’s critical that you involve tax and legal professionals. As we’ve mentioned before, transitioning your business from LLC to C-Corp can come with costly tax penalties. The IRS gives all partners just three months to file a short tax year return and pay their income tax liability. After three months each partner will owe $195 per each month the return is late on top of their income tax liability.
Build Your Own 2019-2020 Business Tax Return Calendar
Add the relevant dates to your 2019-2020 calendar to stay on top of your business taxes:
Profitable? Add the 2020 Estimated Quarterly Payment Deadlines to your calendar:
- Q1: April 15, 2020
- Q2: June 15, 2020
- Q3: September 15, 2020
- Q4: December 15, 2020 (Corporations)
- Q4: January 15, 2020 (Individuals)
Partnerships and S Corporations should add these 2020 filing deadlines for flow/pass-through entities to their calendars:
- Regular: March 16, 2020
- Extended: September 15, 2020
Individuals and C Corporations should add these 2020 filing deadlines to their calendars:
- Regular: April 15, 2020
- Extended: October 15, 2020
Nonprofits and charities should add these 2020 filing deadlines for exempt organizations to their calendars:
- Regular: May 15, 2020
- Extended: November 16, 2020
If applicable, add these to your 2019-2020 dates to your tax calendar:
- Last day to pay employee bonuses that qualify toward 2019 business taxes: February 15, 2019
- #GivingTuesday 2019: December 3, 2019
- The date you start doing business in 2019
- The date you stop doing business in 2019
- Deadlines for any notices from the state/IRS you receive in 2019
Start Planning Now to Save As Much As Your Can on 2019 Taxes
Business owners know there are many ways to save on taxes, but it takes a certain degree of planning ahead to capture all that opportunity cost. Knowing your key tax deadlines is a huge step toward being compliant and avoiding late fees and penalties. Learn more about how Tameka’s Taxes can help you build a comprehensive strategy.
*Adapting Your 2019-2020 Tax Calendar for an Alternative Fiscal Year:
Are you using a fiscal year instead of the calendar year for your business taxes? You’ll still file taxes in the same cadence, but you may need to crunch some numbers to determine your actual tax deadlines. Follow the chart below to see when your taxes are due based on the day your fiscal year ends: