Many entrepreneurs are shocked by the expenses they incur during their startup’s first year of operation. If you’re new to the world of startups, you may find yourself in a similar situation.
One very common question is, of course, “when are business taxes due”? While sole proprietorship startups can file their business taxes alongside their personal taxes, partnerships, LLCs, corporations, and S corporations cannot. What, then, can you do to prepare yourself for your startup’s first tax season?
When To Submit Your Taxes
Your tax schedule will depend entirely on your startup’s classification. You’ll be able to classify your startup one of four ways:
- Sole proprietorship: a startup is a sole proprietorship if you are the only person operating the business. If this is the case, you’ll need to file a Schedule C alongside your Form 1040 come tax time. A Schedule C relays your business profits and losses over the course of a fiscal year. You’ll also need to file a Schedule SE to detail the income you took in while self-employed. Do note that if you expect to owe $1,000 or more, you may need to make estimated tax payments over the course of the year.
- Partnerships and LLCs: If you run your startup with the help of a leadership board or partners, then you run either a partnership or an LLC. In these cases, you must file Form 1065 reporting your income and losses. Every partner must submit Schedule K-1, as well, detailing the income and losses they supervised while in charge of the startup.
- Corporation: Corporations are larger businesses that typically develop expansive leadership boards over time. If and when your startup ever becomes a corporation, you’re going to need to know what documents to file come tax season. Corporations must file Form 1120 to report their revenue and losses.
- S-Corp: the heads of S corporations will need to file Form 1120S at the end of their business’s fiscal year. Shareholders will then need to receive a copy of the submitted Schedule K-1.
Most startups will classify themselves as sole proprietorships, partnerships, LLCs, or C-Corps. Once you’ve determined how you want to classify your startup, you’ll be able to mark a tax date on your work calendar. The aforementioned startup types will need to file taxes by the following dates:
- Sole proprietorship: April 15, submitted along with the owner’s personal tax return
- Partnerships and limited liability companies: March 16
- Corporations: the fifteenth day of the fourth month after the end of the fiscal year
- S Corporations: March 15
If you pay estimated taxes over the course of the year, you’ll have four dates on which you’ll be expected to submit payments to the IRS. These dates include:
- April 15
- June 15
- September 15
- January 15
Each of these payments should reflect an estimated tax percentage based on the income you received during the applicable quarter.
When Do Tax Submission Dates Change?
On occasion, you won’t be able to submit your taxes on their standard day, as that day will fall on a weekend. During years when this is the case, the date at which you’ll be expected to file your taxes will change.
The dates will change based on the day of the week the submission date falls on. For example:
- If April 15th falls on a Sunday, you’ll need to submit your tax return by Monday, April 16th.
- If April 15th falls on a Saturday, you’ll need to submit your tax return by Monday, April 17th.
- If Monday, April 15th is a holiday, you’ll be expected to submit your taxes by Tuesday, April 16th.
The same logic applies equally to partnerships, LLCs, corporations, and S corporations. If the date on which your taxes are due falls on a weekend or holiday, you’ll need to submit the appropriate documents by the next business day.
Can You Apply For A Tax Extension?
Everyone’s schedules are different. You may have to file an extension application if you think your startup won’t be able to pay its taxes on time.
If you’re approved for an extension, each of the aforementioned startup types will be able to submit their taxes on the following dates:
- Single proprietorships: October 15
- Partnerships and limited liability companies: September 15
- Corporation and S Corporations: September 16
You will automatically be granted an extension on your taxes if you send in your tax form by the original due date with an estimate of your taxes due.
With a deadline in mind, you’ll be able to better prepare your startup to face down tax season. Don’t feel as though you have to tackle this challenge alone! Collaborate with accountants, bookkeepers, and experienced professionals during your first tax season. With their help, you’ll be able to navigate the season’s complexities without succumbing to confusion or stress.