Paying your business taxes on time helps you stick to your budget and avoid unnecessary fees and penalties. If you run a small business or a sole proprietorship, you already know that there’s more to taxes than just April 15! For business owners, there are many important dates to keep track of all year long.
Fortunately, it’s possible to get a grip on tax deadlines so you never miss a payment. Here’s what you need to know to keep your tax payments on track.
What taxes do I need to pay?
The kinds of taxes you pay will vary depending on your business structure, as well as other factors (such as whether you have employees or use independent contractors). In general, however, there are five types of business taxes to be aware of:
1. Income tax
Unless your business is a partnership, you need to file income taxes annually. Partnerships file an annual information report, but don’t pay income tax because profits and losses passed through to the partners and are reported on their personal tax returns.
Federal and state income taxes (if your state has income taxes) are due on April 15 unless that date falls on a weekend or holiday; in that case, the due date moves to the following Monday.
2. Estimated taxes
Sole proprietors, partners and shareholders of S corporations generally need to make estimated tax payments if they expect to owe $1,000 or more in federal income taxes for the year. Corporations generally need to make estimated tax payments when they expect to owe $500 or more in federal income taxes for the year.
Estimated taxes are due quarterly (January 31, April 30, July 31, and October 31). If you’d rather pay estimated taxes “as you go,” you can make your payments weekly, biweekly, monthly or whenever you want to as long as the total quarterly estimated amount is paid on time. Using the Electronic Federal Tax Payment System (EFTPS) makes this easy to do.
3. Employment taxes
If your business has employees, you’ll need to withhold and deposit taxes for them, and report this information. You pay Federal Unemployment (FUTA) tax for your employees out of your business’s proceeds. For Social Security and Medicare, you withhold taxes from your employees’ paychecks, and also make your own contribution for each employee. Finally, you withhold federal and state income tax from employees’ wages and deposit them.
You don’t have to withhold or pay taxes for independent contractor; however, you do have to file a 1099 form for each independent contractor that you paid $600 or more over the tax year.
January 31, April 30, July 31, and October 31 are the quarterly due dates for filing employment tax forms; there are also due dates on February 28 and March 31. (Get specifics about which employment tax forms are due when.) Social Security and Medicare tax deposits are due either monthly or semi-weekly depending on your total tax liability; you must determine your deposit schedule before the calendar year begins. FUTA tax must be deposited by the last day of the first month following the end of the quarter. If that date is on a weekend or legal holiday, you can delay your deposit until the following business day.
4. Self-employment taxes
If you are self-employed, you must pay self-employment taxes to cover Social Security and Medicare benefits for yourself. If you expect to owe $1,000 or more in federal income tax for the year, you should pay self-employment taxes by making estimated tax payments. (See the “Estimated taxes” section above for details.)
5. Excise taxes
Excise taxes don’t apply to many small businesses, but you may have to pay them if you manufacture or sell certain products or are paid for certain services. For example, indoor tanning services have to pay an excise tax; you may also have to pay an excise tax if you use certain types of trucks or vehicles. Learn more about excise taxes here.
Reporting information returns
If you made or received certain types of payment during the tax year, either as a business or as a self-employed individual, you may have to file an information return with the IRS. This can include rent, IRA distributions, or payments to independent contractors if those payments are for $600 or more per individual. Information returns are due at the time you file your federal income taxes.
How to stay on schedule
The IRS has an online Tax Calendar you can review to determine your important tax due dates. You can adjust the settings so you only see due dates that are relevant to your business; for example, if you only make payroll deposits once a month, you can set it up to show you that due dates instead of showing you the semiweekly due dates. You can also select the timeframe that you want to see — for example, due dates over a specific number of days, weeks, months or years — or view a certain number of due dates (such as the next three, five or 10 deadlines).
Better yet, to ensure you never miss a payment or form filing, subscribe to the Tax Calendar via RSS feed. You can set it up to remind you either one or two weeks before your tax due dates.
As always, to confirm your tax liability and responsibilities, it’s best to consult your accountant or tax preparer—especially in light of the new tax law, which may have unforeseen effects.
Been taken by surprise by a tax deadline that snuck up on you? Or just worried about how you’re going to pay that upcoming tax bill? Fundbox lets you access business credit quickly and easily. You can also use Fundbox Pay to speed up receivables and put more cash in your account.
Disclaimer: Fundbox and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.