When you own of a small business, there are several key dates throughout the year that you need to pay close attention to, some of the most important being when your taxes are due. Business tax deadlines can be tricky since different types of taxes will have different due dates. So, when will your taxes be due? And are all taxes expected to be paid around the same date?
In this article, we will talk about the tax deadlines for all types of businesses, the correct way to file a tax extension if you are a small business owner, and when each business tax deadline is for the 2023 tax year.
What are the Different Tax Deadlines for Businesses?
With all the changes a new year brings, as a business owner you will need to evaluate any changes that occurred over the past 12 months. Along with taking the time to do a thorough review of your business insurance policies, it’s important to also check the deadlines for filing your business tax returns.
For many small businesses, the main tax deadline to be concerned about occurs on April 18th. However, if your business is a limited liability corporation, an S corporation, or a partnership, you will have been required to file your business tax return much earlier, on March 15th.
What Tax Forms do Businesses Need to Complete in 2023?
If you are a small business owner, you must file your federal income tax each year. These taxes relate to the revenue earned in the previous year.
The forms required to file your taxes depend on the structure of your business. Here are a few examples of the forms that the Internal Revenue Service requires you to fill out:
- For a sole proprietor, you will need to complete Form 1040
- For those who own a limited liability corporation or LLC, you will need to complete either Form 1040 or Form 1040SR
- For corporations, it’s Form 1120
- All S corporations have to file Form 1120S
- All partnerships are required to fill out Form 1065
- If you own a business that has employees, you must also file Form 941. This is required in order to file Medicare taxes as well as the security and income taxes that are withheld from your worker’s paychecks.
- If you have excise taxes that must be filed quarterly, you will need to use Form 720
- You may be required to fill out and submit state forms for your business. This varies depending on which U.S. state/s you do business in and each state’s requirements.
- If you must file a tax payment extension, you will need to fill out either Form 4868, and if you are a small business owner, you will need Form 7004.
How Can I File a Tax Payment Extension as a Small Business Owner?
If you require additional time to complete your 2023 business taxes, you may request an extension. It’s important to remember that if you get an extension, you must still submit the estimated amount taxes you owe.
You will have until your initial tax filing deadline, which is either March 15 or April 18, to apply for a tax filing extension. If approved, you will have six additional months to file your return.
Remember that a tax extension will only extend your filing deadline. This means you are still required to pay any estimated tax payments that are due on your original deadline. You must pay these estimated taxes in order to avoid late fees charged by the IRS.
For some tax situations, you may automatically qualify for a six month extension and you will not need to request it. These exceptions include the following:
- If you are a member of the military and are serving abroad
- If you or your spouse is currently working in a combat zone for the United States Armed Forces
- If you are a U.S. citizen who is living and working outside of the country
- If you are a U.S. citizen who is living in a part of the country recently affected by a serious natural disaster
There are some things you will need in order to file your business extension request. First you will need Form 7004, which is in two parts:
- Part 1 will list all the tax forms you are requesting your extension for. It will also include a new code for each return. If you require an extension for more than one type of tax return, you will need to submit more than one 7004 form.
- In part 2, you will fill out all the basic information about your business including your business structure, your location, and the dates of both your tax and calendar years. You will be required to estimate your total tax and include the total payments and total credits.
How to Calculate Your Estimated Tax Payments
If you’re not sure about how much tax you’ll owe but your situation hasn’t changed much compared to the previous year, you can estimate the figures based on your previous return.
The IRS provides individuals and business owners with helpful tax calculation worksheets that cover all the different taxpayer situations.
If you are in doubt about the exact amount of your tax payment, remember that it is always best to overpay instead of underpay to avoid being charged penalties or interest. If you pay more than you owe, you will have a chance to reclaim it as a tax refund.
The Benefits of Filing Using a Business Tax Extension
Small business owners or self-employed individuals that have a SEP IRA may benefit from filing a business tax extension – it increases the amount of time they have to contribute to their IRA plan.
A SEP IRA is a type of IRA designed for sole proprietors, freelancers, or small business owners. Anyone who is self-employed and has an SEP IRA can make additional deposits to it before the extended deadline (in this case, October 16th).
Additionally, by filing an extension, you can update your federal tax return based on the amount contributed (but keep in mind that you are still funding your account for the previous tax season).
When You Should and Should Not File a Business Tax Extension
Any business owner who needs more time to file should request an extension. It could be due to any reason, whether you are waiting for specific tax documents to be completed or if an emergency came up that delayed your return past the initial due date. You are not required to convince the IRS that you need the extension, and it will be automatically applied. So if you need more time to file, you should request a business tax extension.
However, there are some circumstances when it’s best not to do so. If you are filing an extension just because you need more time to pay for the taxes you owe, the extension will only provide you with more time to file your taxes, not more time to pay them.
If you need more time to pay, the IRS offers debt relief options to any taxpayer who is having a difficult time making their payment by the due date. You can request an IRS payment installment agreement that will split your payment into smaller monthly payments that are much easier to manage.
Important Tax Due Dates for Businesses in 2023
As we have stated, most business owners will need to pay their taxes by April 18th, 2023, and owners of multimember LLCs, S corporations, or partnerships should have paid by March 15th.
Remember, the majority of all small businesses are considered pass-through organizations, so their business income is treated as the owner of the company’s personal income. If that is the case with your business, you will need to have your taxes turned in by March 15, 2023.
Some other important dates to remember are discussed below.
Quarterly Business Tax 2023 Deadlines
Another type of business tax that depends on your company’s structure are your quarterly estimated tax payments. Sole proprietors who do not have any employees are not required to file any quarterly tax disbursements; however, they still have to file their own income taxes each year.
As mentioned earlier, if you must file using Form 941 or Form 720, you will need to file your taxes quarterly. You may also be required to file your state taxes on a quarterly basis, depending on the requirements for the state your business operates in.
Some essential quarterly business tax dates to remember for 2023 and 2024 are as follows:
- The estimated business tax payment for the first quarter of 2023 is April 18th.
- For Q2 2023, estimated tax payments are due on June 15th.
- For Q3 2023, estimated business tax payments are due on September 15th.
- The Q4 2023 extended tax deadline for company owners to file either individual or corporate tax returns if requested is October 16th.
- Q4 2023 estimated business tax payments are due on January 15th, 2024.
Final Thoughts on Small Business Tax Deadlines for 2023
Filling out your business tax forms by the deadline can be an overwhelming task. Even with an extension, it can be difficult for many business owners to get everything prepared on their own. Therefore it is best to consult with your accountant or financial advisor if you run into any issues or have questions about how or when to file.