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Tag: small business taxes

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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January 15, 2022
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 – 30^th April 2021, 31^st July 2021, 31^st October 2021, and 31^st January 2022. However, the other forms have to be filed by 31^st 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 15^th 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 15^th September 2021.

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Corporate Tax Returns

The original deadline to pay this federal tax was 15^th 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 15^th 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 15^th day of every quarter. That is, these taxes have to be paid on 15^th April 2021, 15^th June 2021, 15^th September 2021, and 15^th 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 – 30^th April, 30^th July, 29^th October, and 31^st 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 1^st month of service. Subsequent filings must be completed by 31^st 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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June 16, 2021
2021 Tax Deadlines for Small Businesses
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Many business owners are scrambling to effectively run their business. The last thing you want on your plate is having to recall the various tax deadlines for small businesses, not to mention the various changes. We’ve created a list of key deadlines to note to make taxes a breeze.

2021 Income Tax Filing Deadline Moved to May 17^th

The IRS has moved the income tax filing deadline This date change is for individuals for the 2020 tax year and is extended from April 15, 2021 to May 17^th, 2021.

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17. (IRS)

Many self-employed individuals and businesses must submit estimated tax payments quarterly and file an income tax return annually. The filing dates vary primarily on your entity structure i.e., partnership, S corporation, or sole proprietorship. Sole proprietorships use the same tax schedule s individuals, so 2020 returns are due May 17^th 2021. If you are an S corporation or partnership however the return is due on March 15, 2021.

Estimated quarterly tax payments

If you are self-employed, sole proprietor, partner, LLC member or independent contractor and pay estimated taxes, quarterly tax payments are due by the following dates:
- April 15^th, 2021 for Q1
- June 15^{th ,}2021 for Q2
- September 15^th, 2021 for Q3
- December 15^{th, 2021} for Q4 (C corporations only)
- January 18^th, 2022 for Q4
The IRS is a great resource of quarterly estimated tax payments.

Why you should consider outsourcing your payroll

Employment Taxes and Payroll Withholdings

Form 941 states that small businesses must deposit employment taxes monthly or semi-weekly. Items subject to this requirement include federal income tax, federal unemployment (FUTA) tax, and Social Security / Medicare (FICA) withholdings. Employers must also report their payroll withholdings either on an annual basis or quarterly basis using IRS form 941, 943, 944, or 945.

Form 941 deadlines:
- April 30^th, 2021
- July 30^th, 2021
- October 29^th, 2021
- January 31^st, 2022
Corporate Income Tax Returns

Tax returns for companies are due on April 1thth, 2021 for income received in 2020. By filing Form 7004 businesses my request an extension of six months. The first quarterly estimated tax payment of the year is also due on this date.

S Corporations and Partnership Income Tax Returns

For businesses classified as either an S corporation or partnership, you deadline for submitting your tax return is March 15^th 2021 or the third month after the end of your organizations tax year. Partnerships must complete form 1065 which is used to generate a Schedule K-1 earnings statement for each partner. For S corporations, Form 1120S is needed to prepare the Schedule K-1.

A six-month extension can be requested by submitting Form 7004 along with a deposit equal to the amount of estimated tax owned.

2021 Tax information and resources

This guide is intended to be a resource for business owners and individuals related to tax deadlines. With the various changes as a result of COVID-19, some of the dates may change in addition to being able to qualify for various tax credits for certain expenses. The IRS Small Business and Self- Employed Tax Center is a great resource. If you are a business owner and need assistance with payroll, FICA, FUTA, and other taxes related to business ownership Fortune Business Consulting is also a great resource. Payroll processing services, tax remittance, and HR management are other areas that can assist with being prepared for all of the various tax deadlines.

Request your quote for payroll or PEO services today

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April 1, 2021