- February 18, 2020
As we approach April, the time of year that makes business owners shake in their boots and CPAs guzzle coffee by the gallon, take comfort in one small silver lining: It’s a leap year, so you get an extra day of preparation. Okay, well, I did say it was small…
As the turbulence of last year’s changes to the tax law has stabilized, we have a better handle on how best to adjust and hopefully started putting plans in motion last year that will pay off this year. Nonetheless, there are always a few changes, and keeping them straight can be tricky, so we’ve rounded up the following list of important business tax deadlines, so you can be as prepared as possible for tax season:
- S-Corps, partnerships, and multiple-member LLCs must file returns or extensions. Bear in mind that if you miss this deadline, even by just one day, you’ll be charged a monthly penalty of $195, which will be assessed every month you’re late, per owner. The charge is not prorated, so don’t miss that deadline.
- File for an extension. If you don’t think you can make the deadline for S-Corps, partnerships, and LLCs to file, be safe and file an extension, which gives you until September 15, and you won’t have to pay that steep penalty. (C-Corps and other entities, see below for your deadline and extension information.) But it only works if you file for the extension by March 16. Business tax extensions are filed either electronically by tax preparers OR by mail using Form 7004. We prefer electronic filing, because we receive a record of acceptance from the IRS, which is not the case with paper forms (unless you use certified mail with return receipt, which would be your next best option).
- Newly formed corporations must elect S status by today. By electing to become an S-Corp instead of a C-Corp, you’ll be converting a corporation from paying its own taxes to passing income to the owners or shareholders, thus avoiding double taxation during tax season. If you wish to change to S status, you must do so by March 16.
April 15: Tax Day
- C-Corps, trusts, sole proprietorships, and single-member LLCs must file return. Sole proprietorships file their returns on their individual Schedule C forms by the standard filing date for individuals. This is also the date on which you’d need to file for an extension in order to avoid penalties. The extension would give you until October 15.
- Single-owner LLCs and partnerships run by married couples are disregarded entities, which file Schedule C by April 15. In these cases, the businesses are not seen by the IRS as distinct from their owners, so they file their returns on their individual Schedule C forms by the standard filing date for individuals (April 15). NOTE: This only applies to LLCs organized in community property states, such as Nevada and California. In some states, LLCs owned by married couples may have to file separate tax returns, so be sure to speak with us about the rules in your state.
- Pay California LLC fee of $800. If your business is located in California, your $800 LLC fee is due today. The fee is due even if your business is formed in a different state but is registered as a Foreign LLC or S Corporation in California.
- Private foundations must file Form 990-PF. This is the deadline for private foundations to figure their taxes based on investment income and to report charitable distributions and activities. Extension to file is available to be able to file by August 15.
- LLCs, Partnerships and S Corporations which have requested 6-months extension. This is the final deadline of the year. If the deadline is missed, the late filing penalty of $195 per owner will start accumulating starting back on April 15!
And if your fiscal year ends on a day other than December 31 … Your filing deadline is the 15th day of the third month AFTER the end of your fiscal year (the 15th of the fourth month for C Corporations). So if your fiscal year ends July 31 and you are an S Corporation, the return or extension is due by October 15.
And our most important tax advice? Don’t wait until your appointment with us to prepare your records during tax season! In order for us to be most effective with our time, and in order to work with you to forecast the next year and make informed recommendations, it’s important for you to give us access to all documents early, so that we can prepare your return in a timely fashion and our appointment can focus on planning, which we firmly believe is the most important service we can provide. And please don’t hesitate to contact us with questions or issues you’d like to discuss, no matter what time of year it is – not just during tax season.
Contact us today to schedule an appointment or to discuss any deadlines or requirements that may pertain to your business. Happy tax season!