Small business owners have plenty of responsibilities on their plate, and one of these is paying taxes on time to avoid penalties and fines. Keeping track of tax deadlines can be overwhelming, but it is crucial to avoid missing them. Failure to file and pay taxes on time can attract a host of legal and financial consequences, potentially crippling your business.
In this article, we’ll go over the critical small business quarterly tax due dates, discuss what they entail and provide some helpful tips to stay on top of your taxes.
First Quarter: January 1 – March 31
The first quarterly tax deadline is April 15, applicable to sole proprietors, partnerships and LLCs filing a partnership tax return. If you opted for a fiscal year instead of a calendar year, the tax deadline falls on the 15th of the fourth month following the close of your fiscal year. It is essential to note that this deadline also applies to the estimated payments for the first quarter for taxes owed for the year.
It means that if, after subtracting all your tax credits and deductions, you owe taxes, you must pay the estimated amount on April 15th. Additionally, business owners should ensure that their business expenses are properly recorded to maximize deductions when filing tax returns.
Second Quarter: April 1 – June 30
The second quarterly tax deadline is June 15, and it applies to sole proprietors, partnerships, LLCs filing a partnership tax return, and estimated tax payments for the second quarter.
If your estimated quarterly tax payments are not equal, you may have to annualize your income. This calculation requires you to determine how much you earned and how much you paid in taxes for each quarter you earned the income. Then, you add the figures and divide by the total expected income to determine the taxes you should pay.
Third Quarter: July 1 – September 30
The third quarterly (and most straightforward) tax deadline is September 15, and it applies to the estimated tax payments for the third quarter of the year. The only taxpayers required to abide by this deadline are sole proprietors, partnerships and LLCs filing a partnership tax return.
Making the required estimate payments on time can help avoid an underpayment penalty, which is calculated based on the amount you underpaid, the number of days the payment was late, and the applicable interest rates.
Fourth Quarter: October 1 – December 31
The final small business tax deadline falls on January 15th. It applies mainly to sole proprietors, partnerships, and LLCs filing a partnership tax return. The estimated taxes owed for the fourth quarter must be paid by this date.
January 15th is also significant because taxpayers have the option of making catch-up payments for previously missed quarterly payments for the previous year’s tax return. This deadline provides business owners with a chance to ensure their previous year’s tax returns are accurate and up-to-date.
Conclusion
In conclusion, small business taxes can be confusing and overwhelming, but they are essential to keep your business compliant with legal and financial requirements. Missing quarterly tax deadlines can lead to significant financial and legal consequences. Therefore, it is crucial to remain organized, keep accurate records, and be aware of the due dates.
By staying on top of your taxes and submitting your estimated payments on time, you can save yourself from facing penalties and interest charges. Always consult with a professional accountant as needed for adequate representation to ensure that your business stays compliant with IRS regulations.
