Most people associate the start of a new year with inspired resolutions and improved goals; to business owners, the new year welcomes the first quarter, new opportunity, and most importantly: tax filing deadlines.
The IRS requires different forms, rates, and filing dates depending on the official business entity of your company; furthermore, if you fail to meet the filing requirements pertaining to your business, you may face substantial penalties.
Heightened feelings of intimidation brought on by tax season causes many people to put off necessary preparations until the last possible moment. This not only sets you up for a last-minute scramble, it practically guarantees at least one – if not more- inaccurate entries.
To help clear up any uncertainties surrounding this our team has created this Guide to 2022 Tax Deadlines for your reference, keep reading for more!
Different Business Structures
Sole proprietorship: In a sole proprietorship, the owner keeps their business assets and personal assets tied together, and pays taxes as part of their personal income tax return.
Partnership: A partnership -like a sole proprietorship- also pays taxes as part of each partner’s personal income tax return. But unlike an LLC, partners are still liable for any business debts.
Limited liability company (LLC): When it comes to federal taxes, an LLC functions much like a partnership would. But a small business can file with its state to be organized as an LLC as long as it meets the requirements.
S Corporation: An S corporation – generally smaller – complies with some of the typical corporate obligations and issues. The owners must pay taxes on their portion of the business income as part of their personal tax return.
C corporation: Once your company is fully incorporated, a C corporation structure is the default option. C corporations file and pay a corporate tax return instead of passing income onto the owners’ personal taxes.
Tax extensions
The Covid-19 pandemic upended a majority of business finances, and if you find that you are unable to file tax paperwork for this or any other reason—you can apply for a tax-filing extension.
However, keep in mind that a tax extension merely extends your filing deadline, and that you are still responsible for paying your estimated taxes on your business’s tax-filing deadline.
If you don’t pay your estimated taxes on the day they’re due, the IRS will charge you a late fee.
An extension will give you six more months to file your tax paperwork. You must apply for a tax extension no later than your usual tax deadline:
Sole proprietorships, C corporations, and single-owner LLCs must apply for an extension by April 18, 2022, which extends their tax-filing deadline to October 17, 2022.
Partnerships and S Corporations must apply by March 15, 2022, which extends their tax-filing deadline to September 15, 2022.
Tax Forms
Now that you have an idea of what the business entities are and how to get an extension on your tax return, let’s dive further into the forms you need for filing.
Sole proprietors and single-owner LLCs need to file Schedule C as part of your Form 1040, which is the form you file with your personal tax return.
Partnerships, S corporations, and multi-owner LLCs need to fill out Form 1065. These businesses pass profits (or losses) through to the business owners, who report their earnings on Schedule E on the 1040 Form. They should receive a Schedule K-1 form to help them fill out Schedule E.
C corporations should file their corporate taxes with Form 1120. Owners receive a Form 1099-MISC to report any dividends on their personal income tax returns.
Additional forms
If you own a business with employees, you’ll need to file Form 941 along with the payroll taxes you withhold from employee paychecks and remit directly to the IRS. (You should remit these taxes quarterly, also with Form 941.) Note that household employers are also required to withhold payroll taxes, so they also need to file Form 941.
If your business is subject to any excise taxes, you’ll need to file Form 720. Finally, if your state has a sales tax, you’ll need to fill out a state form for a sales tax return. You can find information on your state’s tax requirements on the IRS’s list of state government websites.
Should I Pay Quarterly or Annually?
If your business has employees, you’ll need to file Form 941 (along with your employees’ payroll taxes) every three months. You will also need to pay a quarterly tax if your business sells specified goods (like gasoline) that require an excise sales tax.
If your business doesn’t fall under those categories, expect to pay at the usual tax time. But if you’re worried about having a large sum of cash on hand to make a lump-sum annual payment, consider paying quarterly instead.
All quarterly estimated tax payments for individuals, S corporations, and C corporations, should be made on the following schedule:
- January 18, 2022
- April 18, 2022
- June 15, 2022
- September 15, 2022
- C Corporations will make their final estimated quarterly tax payment on December 15, 2022. Individuals and other types of corporations can wait until January 2023 to file their fourth quarterly payment for the 2022 tax year.
Deductions and refunds
While you can deduct many different business expenses from your tax liability, not every business will receive a tax refund. Unlike an employee’s income- where a portion of every paycheck is withheld for taxes – a business owner doesn’t have an automatic system in place.
However, a dedicated financial advisor can help you estimate taxes beforehand to make sure you’re covering your expected taxes with quarterly payments.
If you do get a refund, you can expect it about three weeks after you file. So it makes sense to get started on your business tax return right away—save yourself time spent worrying and get your refund earlier if you’re eligible.
Final Thoughts
Please note that while this post serves as a general tax deadline outline, the IRS’s tax-filing calendar has not yet been finalized.
Tax season always seems to roll around sooner than anticipated, and with ever-changing tax laws and regulations making it difficult to keep up, many business owners are left feeling more overwhelmed than ever. With this being said, we hope that this guide leaves you a bit more confident as we head into this tax season.
However, it’s important to remember that one simple mistake can quickly evolve into a high expense situation.
A situation that can be avoided with a professional tax expert.
To learn more about business tax deadlines based on your location and entity structure, reach out to a member of our team. Our tax experts will ensure that we bring you accurate information about when your taxes are due, including any tax deadline changes that could result from COVID-19.
With our well-rounded and customizable financial services, you can take the guesswork out of your business taxes. Avoid waiting to the last minute this tax season and call our office- headquartered in Placentia, Orange County, California – today!
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