Tax Time Survival Guide – Small Business Edition

Tax deadlines are never exciting, but you don’t want to ignore them. As they approach, it’s good to have a game plan so you can attack it with purpose.

So don’t let tax time sneak up on you — get on the other side of tax deadlines in 4 steps.

1 – Know your Deadlines

No need to get penalized for missing deadlines.  Here’s the calendar every small business owner needs for a smooth ride at tax time.

S-Corporations

• Must file form 1120S tax return annually

• Calendar year 1120S is normally due on March 15th, September 15th with extension

• Fiscal year 1120S is due on 15th day of the third month after the end of the year.  The example that IRS.gov gives is: if your tax year ends on June 30th, then the deadline is September 15th

• Late Filing Penalty: $220 per shareholder per month or part month that the return was late, up to 12 months

Partnerships

• Must file form 1065 tax return annually

• All tax filings due dates are the same as 1120S for S-Corporations (see above)

• Late Filing Penalty: $245 per partners per month or part month that the return was late, up to 12 months

C-Corporations

• Must file an 1120 tax return annually

• Generally due April 15th

• Fiscal year 1120 is due on the 15th day of the fourth month after the end of the tax year.  So if the fiscal year ends on July 31st, then the return would be due on October 15th of that year.

• Estimated payments due quarterly on April 15th, July 15th, October 15th, January 15th

2 – Organize your Tax Docs

Filing a business return require your to have the right files.  Here’s exactly what you need to file a business tax return.

1. Prior year tax return (if applicable)

2. Profit and Loss Statements for the year

3. Balance sheet as of the last day of the year

This is the minimum that will be required to file any 1120S, 1065, or 1120 tax return.

3 – Prepare the Tax Return

Tax is both an art and a science, but it doesn’t have to be complicated.

Here are the 3 steps to make sure that you prepare your tax return accurately:

1. Ensure that all accounts are reconciled

2. Tie out retained earnings

3. Ensure that net income per books matches net income per tax return

I go deeper on how to do all this right in another post here (link)

4 – File Returns and Pay Taxes

When the return is ready, you have two more things you must do: file the return, and pay the outstanding taxes due (if any).

If the taxes are hard to pay, then I wrote a blog post here on how to manage that (link)

Then, after the return gets accepted, usually within a week or two, then you are done and on the other side of tax time!

Conclusion

Taxes are a lot like ripping off a band aid – once it’s over, it’s over. 

The tax deadline might seem like it’s coming fast, but you can manage more easily it if you know what to do, when to do it, how to do it, and then what it feels like on the other side.

And if you need any help surviving the extension tax deadline or any other tax time, then feel free to book a consultation here and one of our CPAs will help you get on track.

Thanks for reading.

Stay smart,

Jonathan Sussman CPA