How often does a small business have to pay taxes?
While businesses are only required to file an income tax return once a year, there are several other factors to consider when discussing business taxes. One of these is the due date of the business’s tax return which is dependent upon the structure of the business. Others include additional tax filing obligations that businesses encounter such as estimated taxes and payroll taxes.
Any business with employees is required to withhold and report payroll taxes periodically throughout the year. How often these need to be reported to the government depends on the amount of the business’s total payroll. Higher total payroll obligations must report, and deposit withheld money more frequently than those with a lower total payroll. Businesses must file an Employer’s Quarterly Federal Tax Return (Form 941) along with each deposit. The deposits themselves can be made online through the Electronic Federal Tax Payment System (EFTPS) or can be mailed in.
For businesses that show a profit, they may be required to file estimated taxes based on the profits earned in previous quarters. These payments are then applied to the tax liability of the business at the end of the year. When these estimated taxes need to be filed depends on the structure of the business. Sole proprietors are required to file estimated taxes quarterly on January 15, April 15, June 15, and September 15. Corporations file their estimated taxes on the 15th day of the fourth, sixth, ninth, and twelfth month of their fiscal year.
Return Due Date
Depending upon the structure of a business, its taxes may be due on a different date than others. The taxes for a sole proprietorship are due on April 15 like those of individuals. Partnerships that operate on a fiscal calendar mimicking the calendar year must also file by April 15. However, if the fiscal year ends at any other time, that partnerships’ taxes are due on the 15th day of the fourth month after the end of their fiscal year. Corporations have a similar structure with those following the calendar year due by March 15 while others are due by the 15th day of the third month after the close of their fiscal year.