Category: Federal Tax Deadlines

  • What Your Balance Sheet Doesn’t Show: The Real Business Value of a PEO

    What Your Balance Sheet Doesn’t Show: The Real Business Value of a PEO

    Because sometimes, the biggest profits come from what you didn’t lose.  You won’t see it at first glance. 

    There’s no flashing red alert. No urgent Slack message. No budget meeting meltdown. Just a quiet, consistent drain happening behind the scenes of your growing business. It might show up in the form of a compliance fine you didn’t see coming. Or the resignation of a high  performer after one too many payroll glitches. Or worse—lawsuits, turnover, and missed opportunities stacked like hidden fees under “Operating Expenses.”  But here’s the twist: 

    Most of those losses could’ve been avoided… with the right PEO. 

    The ROI You Can’t Calculate (Until It’s Too Late) 

    When most business owners consider a PEO (Professional Employer Organization), they look at costs upfront—and often forget to assess the costs of not having one.  A PEO’s ROI is rarely found in flashy dashboards or spreadsheets.

      It’s found in the: 

    • Lawsuit that never happened 
    • Star employee who stayed because of better benefits 
    • Penalty that was prevented before it was ever filed 
    • HR fire that never reached your desk 

    What You Think You’re Paying For: 

    • Payroll processing 
    • Employee onboarding 
    • Compliance checklists 
    • Benefit access 

    What You’re Actually Getting: 

    • Legal protection 
    • Risk prevention 
    • Strategic HR planning 
    • Improved retention 
    • Business continuity 
    • Peace of mind 

    And most importantly—time back to lead, not chase admin. 

    The Cost of an HR Mistake Can Be 10x the PEO Fee 

    An EEOC violation alone can cost between $10,000 and $100,000.  Wage and hour lawsuits? Even more. According to the Society for Human Resource Management (SHRM), the average cost of just one bad hire is nearly $240,000 when your account for lost productivity, morale damage, and rehiring expenses.  A PEO minimizes those odds with structured hiring processes, HR best practices, and access to experts who live and breathe compliance. 

    Better Benefits Without Bleeding Cash 

    By co-employing your staff, PEOs give you access to benefits typically reserved for large corporations: 

    • Group health insurance 
    • 401(k) plans 
    • Mental health support 
    • Wellness programs 
    • Workers comp coverage 

    And because you’re part of a larger buying pool, you get enterprise-level coverage at SMB prices.  According to the National Association of Professional Employer Organizations (NAPEO), companies that use a PEO: 

    • Grow 7–9% faster 
    • Experience 10–14% lower employee turnover 
    • Are 50% less likely to go out of business 

    Time is the New Currency 

    Most CEOs don’t start businesses to become part-time HR managers.  But when compliance updates change weekly, employees need questions answered, and hiring surges overnight, you end up buried in tasks that take you away from growth.  A PEO handles the operational chaos, so you can focus on: 

    • Launching new services 
    • Expanding into new markets 
    • Leading your team 
    • Building client relationships 

    Talent Stays Where HR Works 

    Quiet quitting. Burnout. Lack of development. These aren’t just HR buzzwords—they’re indicators that your people feel unsupported. PEOs don’t just process paperwork. They build cultures. From onboarding design to fair policies and performance tracking, they help businesses create environments where employees want to stay—and thrive. 

    Risk Is the Hidden Killer of Growth 

    Think your business is too small to get sued? Think again.  One compliance misstep could derail everything you’ve built. And here’s the worst part: you often don’t know it’s coming until it hits.  A PEO keeps you ahead of risk with: 

    • Up-to-date legal guidance 
    • Automated filings 
    • Employee handbook developmen 
    • Investigations and conflict resolution 
    • On-demand HR counsel 

    So, What’s the Real ROI of a PEO? It’s not just savings—it’s security, scale, and strategy. In a time when regulations are shifting, talent is scarce, and competition is cutthroat, your HR setup shouldn’t just help you survive. It should fuel your ability to thrive  Thinking Beyond Cost—Thinking Growth . The smartest business owners aren’t asking “What does a PEO cost?”  They’re asking: 

    “What’s it costing me not to have one?” 

    Ready to see the hidden ROI for yourself? Let’s explore what a PEO would look like for your business. Prefer to read more success stories and insights? Browse the rest of the series here.  

    References

  • Never Worry about Tax Season Again, Dear Small Business Owners

    Never Worry about Tax Season Again, Dear Small Business Owners

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    Does the upcoming tax season put a burden on your mind? Then, dear small business owners, give this blog a read. It will help you prepare for the upcoming tax season and deal with it like it’s a piece of cake. 

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    5 tips for driving away tax season blues

    Here are 5 tips to help you deal with the tax season:

    • Conduct a quarterly review of your business’s performance

    The best way you can prepare yourself for the tax season is by performing quarterly reviews of your business’s financial statements. By reviewing the profit and loss statements and all the other expenses related to your business, in this manner, you will be able to make sure that everything is in proper order. 

    In addition, the Internal Revenue System (IRS) expects quarterly payments from small business owners who predict to owe more than $1,000 at the end of the financial year. Therefore, you can make an estimation of the year-end tax bill and pay the amount by filing Form 1040-ES. 

    You can pay your quarterly tax on the following dates:

                1. 15th April
                2. 15th June
                3. 15th September
                4. 15th January
    • Separate your personal and business-related finances

    Many small business owners get into tax troubles as they record their personal costs as business expenses. Thus, it would be best if you separated them in order to avoid trouble with the IRS. If the federal agency decides to audit your business and finds out that you mingled your expenses, it will automatically start looking into your personal expenses because of the comingled money. 

    One good practice is having separate bank accounts and credit cards for your business and personal expenses. Moreover, it is also necessary that you run only your business-related expenses from your business account or credit card.

    This will enable you to file a clean and accurate record of your business expenses when the tax season comes. In addition, your personal expenses will also remain private.

    • Maintain accurate records

    In order to file your tax returns correctly, it is crucial for you to maintain accurate records. This is a critical step to avoid an audit by the IRS. For example, you can pull bank statements from your business account and tally them with invoices or receipts to keep track of your income and expenses. 

    A common mistake that most small business owners make is that they do not record credit card points as their business’s profit. Unfortunately, these errors only crop up in the event of an audit and, therefore, should be recorded as income.   

    Furthermore, to maintain a clean record, experts recommend that you use basic accounting software to track your finances correctly. You see, while filing your taxes, human error is a possibility that you just cannot rule out. 

    So, to avoid inaccurate tax returns, you can take the help of various accounting platforms available in the market. What’s more, these software programs will easily integrate with your e-commerce store and automatically create reports. Thus, they will save your time and also reduce the chances of errors.

    • Create a checklist from the previous tax season’s documents

    It is a very hectic and time-consuming task to collect all your documents when the tax season comes. Thus, if you make a checklist from last year’s tax season, you already have an idea of what documents to submit in the current season. 

    You can keep all your tax documents in one file and tally them with what you may have missing in the current year’s documents.   

    Neatly organizing all your tax documents will help you keep them in order and enable you to avoid last-minute hassles. Furthermore, communicating and working together with your accountant also helps out a lot.

    • Classify your business correctly

    A lot of small business owners face problems when it comes to classifying their businesses correctly. If you fail to do it correctly, you can end up overpaying during the tax season.

    Remember, classifying your business as a Sole Proprietor, Single Member LLC, Limited Liability Company, Limited Liability Partnership, or C or S Corporation will have different effects on your taxes. Thus, the best practice in this regard is to get a consultation from an accountant and attorney to know how to classify your business correctly.    

    These are a few small tips that you can take into account while preparing yourself for the tax season. Furthermore, you should consult a Certified Public Accountant (CPA) to know the tax laws in your state and also check for business tax deductions.

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    Reference Links:

    https://www.forbes.com/sites/forbesfinancecouncil/2020/05/12/14-tips-to-help-business-owners-navigate-tax-season/?sh=9775d1f58f40

    https://www.shopify.com/in/retail/small-business-tax-tips

    https://www.nationwide.com/lc/resources/small-business/articles/tips-for-small-business-taxes

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    Contact Us

    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

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  • An Ultimate Employer Guide to Understanding Payroll Deductions

    An Ultimate Employer Guide to Understanding Payroll Deductions

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    When you are running a business, apart from paying payroll taxes, you, as an employer, are also obligated to withhold some amount from your employee’s pay as payroll deductions. However, to ensure you are processing it efficiently and correctly, you need to understand the basics of payroll deductions. 

    Are you interested? Then read further to know about it!

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    What Are the Basics of Payroll Deduction?

    There are two types of deductions. One is voluntary, which you can deduct from your employee’s paycheck only if you have a written authorization certificate. Some examples of it include 401(k) and health insurance deductions. The second is mandatory by law, such as FICA and federal income taxes. 

    However, not all employees are liable for these deductions. In other words, independent contractors do not need to get their payments deducted. 

    Now, before moving into a deeper understanding of several deductions, you must understand there are two basic categories of deductions, i.e., pre-tax deductions and post-tax deductions. 

    What Are the Types of Deductions?

    There are two basic categories of deduction under which there are several other types of applicable payroll deductions:

    • Pre-Tax Deduction: The amount employers deduct from the gross salary before calculating the tax is called pre-tax deduction. This helps employee decrease their taxable income. 
    • Post-Tax Deductions: The amount employers deduct after calculating all the taxes are called post-tax deductions. 

    The salary the company calculates after considering these pre and post-tax deductions is the take-home salary of employees. Other payroll deductions further categorized under pre- and post-tax deductions are discussed below. 

    What Are the Mandatory and Voluntary Payroll Deductions?

    As discussed, there are certain amounts that employers must deduct mandatorily as specified by law, while there are other voluntary deductions employers make to benefit their employees. The classifications are:

    • Mandatory Deductions

    These are standard payroll deductions that are mandatory under law and usually make up the pre-tax deductions:

    • Federal Income Tax

    The payroll deduction you make from an employee’s paycheck as federal income tax depends on the gross pay and the allowance stated in Form W-4. This federal income tax amount ranges from 10% to 37% of the taxable income.

    • State Income Tax

    All nine states have to pay income tax on employee earnings. It is either against all income at a fixed rate or contains multiple brackets. Also, your payroll system must be able to calculate state income tax depending on the area your employee lives in, their type of employment and other criteria.

    • FICA or Federal Insurance Contributions Act Taxes

    FICA is generally applicable to Medicare and Social Security employees. Here, Social security costs 6.2% up to $ 147,000 in 2022, while Medicare costs 1.45%. In addition, it can also include a Medicare surtax of 0.9%. 

    However, the surtax only applies if an employee’s wage reaches $ 200,000 ($250,000 for employees filing jointly or married). Moreover, the surtax is applicable only on the exceeding amount. Also, remember, as an employer, you are liable to withhold at least 7.65% of your employee pay, excluding Medicare Surcharge. 

    Voluntary Deductions

    These are post-tax deductions. Some of its examples are:

    • 401(k): It is a retirement plan containing employee contribution whose limit is up to $ 20,500 in 2022.
    • Health Insurance Premiums: Depending on the type of health insurance a company offers, like vision, dental and medical, employees can contribute to their FSA account. 
    • Wage Garnishments: The government can issue a wage garnishment order if an employee has an unpaid debt. It can be in the form of student loans, child support, alimony, and credit card debts. Here the limit that needs to be garnished will depend on the type of debt. 

    Take the above deductions into consideration when calculating the payroll of employees. If you find it difficult, considering there are so many things to remember, you can always take the help of a professional service provider. For assistance, contact us!

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    Reference Links:

    https://www.forbes.com/advisor/business/what-is-a-payroll-deduction-plan/

    https://www.investopedia.com/terms/p/payroll-deduction-plan.asp

    https://www.nerdwallet.com/article/small-business/payroll-deductions

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    Contact Us

    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

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  • Form 1099 and Form W-2: Know How They Are Related to Payroll

    Form 1099 and Form W-2: Know How They Are Related to Payroll

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    If you are an entrepreneur, you need to issue Form W-2 and Form 1099 to your organization’s employees every year.

    But are you aware of these two forms?

    You can invite potential fines for yourself if you provide an incorrect form to your company’s employees. To avoid facing such issues, it is imperative to know the difference between Form 1099 and W-2 and how these are related to payroll.

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    What Is Form 1099?

    There are several types of Form 1099, but all of them cater to the same purpose – taxpayers use them to provide information to the IRS (Internal Revenue System). This information is about the various kinds of income that individuals receive apart from the regular salary throughout a year.

    To avoid an audit, taxpayers must report every outside income to the Internal Revenue System. This income can include investment dividends, freelance work compensation, or bank interest. Issuers of Form 1099 should send one copy to the taxpayer or recipient of the payments and another one to the IRS. Some issuers send their forms electronically, while some do it via mail.

    Two common 1099 forms are 1099-MISC and 1099-NEC. Freelancers or independent contractors receive these forms to report the paid wages without taxes withheld to the IRS.

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    What Is Form W-2?

    Also known as the Wage and Tax Statement, Form W-2 is a document that an employer needs to send to all employees and the IRS (Internal Revenue Service). Form W-2 reports the tax amount withheld from the paycheck and annual wages of the employees.

    Employers should also use Form W-2 to report FICA (Federal Insurance Contributions Act) taxes for their employees throughout a year.

    Form W-2 covers the following information for a tax year:

    • State Income: Amount that was withheld for state income taxes (if any)
    • Taxable Income: An employee’s income and the portion of that income that was withheld for federal taxes
    • Social Security and Medicare Income: Amount withheld for FICA taxes

    Some more essential facts to keep in mind regarding Form W-2 include:

    • Earnings cover non-cash payments of $600 or more for a year
    • Form 1099 determines whether an individual makes a payment or gets a refund during tax season.
    • Employers should offer the employees copies of their W-2 forms by the end of January every year.
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    How Are Form 1099 and Form W-2 related to payroll?

    A Form W-2 contains all information starting from the year’s first pay-check to the final processed payroll. Employees who receive this form receive an overview of all taxes withheld, deductions made for health insurance or retirement contributions for a calendar year and earned wages.

    Typically, employers start to verify employee details in October and November to prepare for year-end processing and Form W-2 distribution to employees. The kind of information that must be verified include the following:

    • Employee addresses
    • Employee names
    • Social security numbers

    After verifying or correcting this information, employers prepare to generate Form W-2 for its distribution in January. If employers use a provider that provides payroll tax compliance services, then this procedure can be as simple as making Form W-2 available to employees in an online portal for easy access.

    A key difference exists between a Form W-2 and a Form 1099. The former is issued to an employee to report their payroll taxes and income withholding. And, the latter is given to an independent contractor to report income to the IRS.

    Besides these forms, if you seek a reliable payroll service provider, you can get in touch with us. For reference, you can go through our blogs to learn more about our customized payroll services.

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    Reference Links:

    https://www.investopedia.com/terms/w/w2form.asp

    https://www.stoketalent.com/blog/difference-between-w2-and-1099/

    https://www.investopedia.com/articles/personal-finance/082514/purpose-1099-forms.asp

    https://apspayroll.com/blog/difference-form-w-2-and-form-1099-misc/

    https://www.irs.gov/government-entities/federal-state-local-governments/when-would-i-provide-a-form-w-2-and-a-form-1099-to-the-same-person

    https://www.irs.gov/government-entities/form-w-2-and-form-1099-misc-filed-for-the-same-year

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    Contact Us

    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

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  • Why You Need to Pay Business Tax and Corporate Tax on Time: Know the Reasons

    Why You Need to Pay Business Tax and Corporate Tax on Time: Know the Reasons

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    If you are a business owner or an entrepreneur, you should always pay your taxes responsibly. But before that, you must have an idea about the taxes you are liable to pay.

    Read on to gain an insight into the various vital aspects of tax and their payments.

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    A Closer Look at Business Tax

    The type of payable taxes and how business owners must pay them depends on the type of business being operated. Given below are the five general kinds of business taxes:

    • Estimated Taxes – Individuals, including S corporation shareholders, sole proprietors, and partners, generally need to pay estimated taxes if they anticipate owing taxes of $1,000 or more while filing returns.
    • Self-Employment Tax – Self-employment tax or SE tax refers to a Medicare tax and social security primarily meant for individuals working for themselves. These tax payments contribute towards an individual’s coverage under the social security system.
    • Employment Taxes – Employers have some employment tax responsibilities that they must pay. These taxes include Federal Unemployment Tax (FUTA), Social Security and Medicare taxes, Federal income tax withholding.
    • Income Tax – Every business except partnerships should file an income tax return annually. The form used depends on how a business is organized.
    • Excise Tax – You must pay excise tax if you sell or manufacture some particular products, operate certain types of businesses, receive payment for some specific services, or use different kinds of products, equipment, or facilities. Besides this, there are certain forms that you need to file.
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    An Overview of Corporate Tax

    Corporate tax refers to the tax levied on a corporation’s profits. These taxes are paid on the company’s taxable income that includes revenue minus cost of goods sold (COGS), selling and marketing, general and administrative (G&A) expenses, depreciation, research and development, and other operating costs.

    For business owners, paying corporate tax can prove to be more beneficial instead of paying individual income tax additionally. Corporate tax returns deduct fringe benefits, including retirement plans, medical insurance for families and tax-deferred trusts. Moreover, it is easier for an organization to deduct losses.

    An organization may deduct the total loss amount, while a sole proprietor should provide evidence for the intent to make a profit before deducting losses. Finally, the profit that an organization makes may be left within it only, thereby allowing for potential future tax advantages and tax planning.

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    What if You Are Late with Your Tax Payment or Do Not Pay Them at All?

    Taxpayers may need to pay the penalty if they do not meet their tax obligations. The IRS charges a penalty for several reasons like if taxpayers do not:

    • Offer accurate information returns
    • File tax return on time
    • Pay any owed tax on time and in the correct way
    • Prepare accurate tax return

    If a taxpayer does not pay the penalty in full, the IRS may charge interest on the same – they will charge some penalties each month until the concerned individual pays the entire owed amount.

    When the IRS charges a penalty, they send a letter or notice via mail. This letter or notice illustrates the penalty details, the reason for the same and what needs to be done next.

    If your organization lacks proper infrastructure in areas of payroll, HR and risk management, it may lead to several issues within the system. These may further result in you not paying taxes on time and thereby facing a penalty. So, in that case, you can consider us as an option to go for. As a reference, you can check out some blogs on our website that will help you to get an insight into what we offer.

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    Reference Links:

    https://www.thebalancesmb.com/late-payment-of-business-taxes-397688

    https://www.irs.gov/newsroom/if-youve-filed-but-havent-paid

    https://www.irs.gov/payments/penalties

    https://www.taxesforexpats.com/expat-tax-advice/IRS-tax-penalties.html

    https://www.investopedia.com/financial-edge/0312/what-happens-when-you-cant-pay-your-taxes.aspx

    https://www.irs.gov/businesses/small-businesses-self-employed/business-taxes

    https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

    https://www.investopedia.com/terms/t/taxes.asp#toc-types-of-taxes

    https://www.investopedia.com/terms/c/corporatetax.asp

    https://www.thehartford.com/business-insurance/strategy/understanding-business-taxes/types

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    Fill out the form below and we will contact you to schedule a chat.

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  • Bookmark these Upcoming Federal Tax Deadlines for Small Business Now!

    Bookmark these Upcoming Federal Tax Deadlines for Small Business Now!

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    As the IRS keeps pushing the income tax filing deadline in the U.S., some businesses struggle to keep up with the updates. Of course, this increases the risk of missing the tax filing due date to a great extent.

    But, failing to file federal income tax returns is a luxury that small businesses can’t afford.

    Why is that?

    Failing to pay taxes on time attracts back taxes that accrue penalty plus interest. This can catapult your tax debt through the ceiling, making it more difficult to repay what you owe. Next thing you know – the IRS is knocking on your door, ready to seize your business assets.

    You can, of course, stop this snowball effect by simply keeping a tab on the upcoming tax deadlines that apply to your business.

    To help you out, here is a list of upcoming federal tax deadlines that should be on your priority list.

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    Employment Taxes & Payroll Withholdings

    This tax applies to Social Security or Medicare (FICA) withholding and federal income tax, federal unemployment, or FUTA tax. Small businesses are required to deposit employment tax either monthly or semi-weekly as per the reported liability on Form 941, Employer’s Quarterly Federal Tax Return. As an employer, you must also report payroll withholdings annually or quarterly on IRS Form 941, 943, 944, or 945.

    Tax deadline: For Form 941, the key deadlines are – 30th April 2021, 31st July 2021, 31st October 2021, and 31st January 2022. However, the other forms have to be filed by 31st January or the last day of the first month of a calendar year.

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    Income Tax Returns for Partnerships and S Corporation

    Is your business classified as an S corporation or a partnership?

    If yes, then note the following dates down!

    Usually, this tax has to be paid by 15th March, but you can apply for a 6-month extension by filing Forms 7004 and paying the estimated tax dues.

    Tax deadline: The final deadline after an extension to file the tax returns and applicable interest and penalties would be 15th September 2021.

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    Corporate Tax Returns

    The original deadline to pay this federal tax was 15th April 2021. However, just like the previous tax, a 6-month extension was allowed to those who filed Form 7004 and paid the estimated tax due.

    Tax deadline: If you had opted for an extension, know that you have until 15th October. 2021 to file your income tax returns. Remember, you will have to file the taxes using Form 1120, and you must pay the remaining taxes, applicable interest, and penalties by this date without fail.

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    Estimated Income Tax 2021

    As a business owner, you should calculate your quarterly estimated income liability beforehand and use worksheet Form 1120-W.

    Tax deadline: As far as this tax due date is concerned, quarterly estimated income tax for corporations is paid on the 15th day of every quarter. That is, these taxes have to be paid on 15th April 2021, 15th June 2021, 15th September 2021, and 15th December 2021.

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    Federal Excise Tax

    While these taxes apply to various products and industries, the filing requirements vary among businesses.

    For example, manufacturers, retailers, communication companies, and travel services need to file Form 720 every quarter. On the other hand, companies accepting wagers have to file Occupational Tax and Registration Return for Wagering using Form 11-C. They also file Form 730 every month.

    Businesses that operate heavy vehicles designed for highways have to file Form 2290.

    Tax deadline: The Federal excise taxes filing dates are given below –

    • Form 720 due date – 30th April, 30th July, 29th October, and 31st January
    • Form 11-C due date – Before accepting bets
    • Form 790 due date – Every subsequent month
    • Form 2290 due date – Last day of the heavy vehicle’s 1st month of service. Subsequent filings must be completed by 31st August 2021.

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    Note, the state income tax filing deadline tends to vary. So, to ensure that you don’t miss the deadline, make sure to check with your state tax collection authority beforehand.

    Keeping a tab on tax deadlines and filings is tedious, especially for a busy entrepreneur like you. Fortunately, you can leave this dull task to a PEO and focus on your business.

    Contact us now to learn more.

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    Reference links

    https://www.2290online.com/2290-due-dates#:~:text=The%202021%2D2022%20annual%20Heavy,deadline%20is%20August%2031%2C%202021.

    https://www.simplybusiness.com/simply-u/articles/2020/11/small-business-tax-deadlines/

    https://www.hiscox.com/blog/2021-federal-tax-deadlines-for-your-small-business

    https://www.thebalance.com/income-tax-deadlines-3192862

    https://www.taxback.com/blog/us-key-tax-dates/

    https://www.irs.gov/businesses/small-businesses-self-employed/employment-tax-due-dates

    https://greaterphoenix.score.org/blog/what-happens-when-you-dont-pay-your-business-taxes

    https://www.thebalancesmb.com/late-payment-of-business-taxes-397688

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    Contact Us

    Find out if a PEO is the right solution for your business.
    Fill out the form below and we will contact you to schedule a chat.

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