April 15th, the deadline to file your personal income tax, will be here before you know it. As a small business owner however, you will have filed tax reports and paid all sorts of taxes already.
Most small businesses operate on a calendar year. And even though tax events happen throughout the year, they are reported at the end of the business year and quarter, when they get submitted to different taxing authorities.
Paying attention to those timelines is critical. Countless business owners have lost their business by ignoring the IRS and other taxing authorities.
Remember that you, as the owner of the business, are responsible that taxes are filed, paid on time and reported accurately. It does not matter who will do the work for you, the ultimate responsibility rests with you.
This is the reason you MUST have some basic knowledge about your tax obligations as a business and as the business owner.Below is a brief list of the most common taxes and tax reports and when to file and pay them. Please note that this is not a complete list of all the possible taxes.
Quarterly Taxes and Reports
You’re required to pay self employment taxes on the income you earn throughout the year.
Most non corporate business structures file estimated taxes on or around April 15th for Quarter 1, June 15th for Quarter 2, September 15th for Quarter 3 and January 15th for Quarter 4 (exact due dates vary slightly from year to year).
SE taxes are reported as part of IRS Form 1040; quarterly estimated tax payments are submitted via IRS Form 1040-ES.
FICA, FUTA, Labor & Industries and Employment Security:
If you had employees during the tax year, you are required to file an Employer Federal Tax Return, reporting FICA (Social Security tax) and income tax withheld for your employees during the quarter; tax payments are submitted with report 941.
Next is Federal Unemployment Tax. These tax deposits are made on a quarterly basis if the unemployment tax collected is greater than $500. Otherwise, FUTA will be reported and paid at one time, due at the end of the year.
Both Labor & Industries and Employment Security are state dependent. Tax rates and reporting frequency vary so check with your state for the details.
Annual Taxes and Reports
1099-Misc: You are required to issue a 1099-Misc for any contract work over the amount of $600. 1099s must be issued no later than January 31st for the prior tax year.
W2 and W3: Again, if you had employees, W-2s and W-3s are due at the end of the year. You must issue a W-2 to your employees no later than January 31st for the prior year. Submit the W-2 and W-3 to the Social Security Administration no later than the last day of February.
FUTA: File the federal unemployment tax return (Form 940) with the IRS, no later than January 31st.
Business taxes can be confusing. The IRS publishes a number of different tools for small business. One of those tools is a tax calendar that lists all the important tax dates for small business.
Go to: http://www.irs.gov/businesses/small/article/0,,id=176080,00.html to get your copy or to subscribe to the online version.
I hope the information helps you to better understand your Taxes.
Happy Tax Season…
Johanna Hofmann, MBA, LAc