Tax TipsMake Sure You Know Your IRS Tax Deadlines for Filing Your 2020 Business Taxes in 2021

March 3, 2021by Celene Robert0
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Whether you file your business’s taxes yourself or you have help, making sure your tax returns are right and on time is a lot easier when you

  1. have a year-round reliable accounting team and
  2. have the right deadlines marked on your calendar.

By outsourcing your business’s accounting and taxes with inDinero, you’re covered on both fronts. We’ll provide the information you need to create the appropriate 2021 business tax calendar to keep up with your tax filing responsibilities and avoid late penalties.

Are you still working on your 2019 business taxes? Check out those dates in the 2019-2020 version of this calendar.

We created three calendars for busy business owners. One is based on your type of business (i.e., sole proprietorship, S corporation). The second is based on your filing schedule (i.e. annual or quarterly). The third has all the IRS due dates if you use an alternative fiscal calendar.

 

1. All the deadlines for 2020 business taxes in 2021 by Type

Using your entity type, you can identify your deadline for filing business income taxes and what it would be if you elect to take advantage of the extension, which needs to be filed before the original tax deadline date.

The table below covers when each type of business entity needs to file 2020 income taxes in 2021 (for calendar year 1/1/20 through 12/31/20 filers):

 

2021 Tax Deadlines for Filing 2020 Business Returns

Partnership Tax Deadlines Due Date
Original tax deadline for partnerships (Form 1065) March 15, 2021
Extension tax deadline for partnerships (Form 1065) September 15, 2021
S Corporation Tax Deadlines Due Date
Original tax deadline for S Corporations (Form 1120-S) March 15, 2021
Extension tax deadline for S Corporations (Form 1120-S) September 15, 2021
C Corporation Tax Deadlines Due Date
Original tax deadline for C Corporations (Form 1120) April 15, 2021
Extension tax deadline for C Corporations (Form 1120) October 15, 2021
Sole Proprietor Tax Deadlines Due Date
Original tax deadline for sole proprietors and individuals (Form 1040) April 15, 2021
Extension tax deadline for sole proprietors and individuals (Form 1040) October 15, 2021
Nonprofit Tax Deadlines Due Date
Original tax deadline for exempt organizations (Form 990) May 15*, 2021
Extension tax deadline for exempt organizations (Form 990) November 15, 2021

* May 15 is a Sunday, so the deadline will be the next business day, which is Monday, May 17, 2021.

 

What partnerships and S corps cannot overlook by their tax deadline

S Corps and Partnership entities are “flow-through” or “pass-through” because they do not pay income tax. As a flow-through, your business’s income and losses get passed on to the partners, owners, or shareholders.

So when your flow-through entity files a Form 1065 or Form 1120-S with the IRS, you must also issue Schedule K-1s to each partner or shareholder for them to report on their returns.

For this reason, if you plan on electing to extend your tax deadline, be sure and let all partners and shareholders know so they can do the same!

 

The one date individuals and corporations must remember to pay their taxes on time

As an individual (sole proprietorship or corporation), your taxes are due on the fifteenth day of the fourth month of your fiscal year or the fifteenth day of the tenth month if you file an extension. For calendar year filers, you will file either your taxes or an extension on April 15, 2021, and pay any tax liability you owe.

If you ask for an extension, you will file taxes by October 15, 2021, but you will still need to pay taxes by April 15.

 

When to consider the tax extension for your 2020 business taxes

An extension only applies to the deadline for filing your return, NOT paying any taxes you’ll owe. So, what are some reasons for asking for an extension on filing your return?

  1. You need extra time to get organized
  2. Disruptions in your business or personal life
  3. Your 2020 business activities have way more tax consequences than you expected

Extending your return deadline doesn’t need to be a stressful decision. It should help eliminate stress!

For C Corporations, Partnerships, and S Corporations, you’ll use Form 7004 to request a six-month extension; individuals use Form 4868. For nonprofits, you can request a six-month extension using Form 8868.

Before you make any decisions, be sure to talk about it with your tax preparer. They may have a reason not to extend.

 

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Four other considerations when filing your 2020 taxes

 

1. Did your business have any foreign relationships or activities during 2020?

If you have overseas shareholders, missing the filing deadline for foreign fillers got very pricey a few years ago. New tax laws went into effect in 2017 that made filing late 250% more expensive. So please file your Form 5472 on time to avoid a $25,000 per 30-day period per required shareholder (yikes!) penalty.

 

2. Did you start or stop your business in 2020?

While it might be tempting to forget about taxes in the first and last year of your business, or as a seasonal business that only exists for a portion of the year, we want to remind you that you’ll still need to file a short year return.

If you started a business in 2020, you’d need to file taxes beginning on the date of formation through the end of the year. Talk to a tax expert to determine what can and cannot be deducted. For example, the costs you incurred before you started your business won’t be deductible, but you may find you’re able to capitalize and deduct those costs over the next 15 years.

If you shut down your business in 2020 or later, take note of the exact date, you closed your doors for tax purposes. You’ll need to file a return that includes all income and expenses up to the dissolution date. All that should remain in any business accounts after the doors close are the amounts that you plan to distribute to investors as you cash out and whatever you’ve set aside for paying any final tax liability.

 

3. Did you convert your LLC into a C Corp in 2020?

When converting a business from an LLC to a C Corporation, it’s critical that you involve tax and legal professionals. As we’ve mentioned before, transitioning your business from LLC to C-Corp can come with costly tax penalties.

The IRS gives all partners just three months to file a short tax year return and pay their income tax liability. After three months, each partner will owe $195 per month the return is late on top of their income tax liability. Let your tax pro know because being late can add up to a lot of money.

4. Did you receive a notice from the IRS or a state tax authority in 2020?

All federal or state tax notices will have a deadline by when the taxpayer must respond. Be sure to respond promptly and consult a tax pro about how you should proceed. But also, don’t freak out! If you receive a notice, follow these instructions and tips for working with the IRS.

 

2. All the 2021 estimated quarterly tax payment due dates for profitable businesses

For a profitable business, you’re responsible for paying tax on income in quarterly installments due by the fifteenth day of the fourth, sixth, ninth, and twelfth* months of the year (see IRS Form 1120-W).

 

2020 Estimated Tax Payment Due Dates (Based on Calendar Year):

Quarterly Deadline Due Date
First Quarter Tax Estimate Deadline April 15, 2021
Second Quarter Tax Estimate Deadline June 15, 2021
Third Quarter Tax Estimate Deadline September 15, 2021
Fourth Quarter Tax Estimate Deadline (Corporations) December 15, 2021
Fourth Quarter Tax Estimate Deadline (Individuals) January 17, 2022

 

If you miss your estimated tax payments, you can always pay them in full when you go to file at the end of the year, but also expect to pay interest and penalties on what you owe.

 

3. Adapting Your 2021-2022 Tax Calendar for an Alternative Fiscal Year:

Are you using a fiscal year instead of the calendar year for your business taxes? You’ll still file taxes in the same cadence, but you may need to crunch some numbers to determine your actual tax deadlines.

Follow the chart below to see when your taxes are due based on the day your fiscal year ends (Tip: use the next business day if dates fall on a weekend or a federal holiday):

 

when are taxes due

 

Build your own 2020-2021 business tax return calendar

Add the relevant dates to your 2020-2021 calendar to stay on top of your business taxes:

Profitable? Add the 2020 Estimated Quarterly Payment Deadlines to your calendar:

  • Q1: April 15, 2021
  • Q2: June 15, 2021
  • Q3: September 15, 2021
  • Q4: December 15, 2021 (Corporations)
  • Q4: January 17, 2022 (Individuals)

 

Partnership or S-Corporation? Add these 2020 filing deadlines for flow/pass-through entities to your calendars:

  • Regular: March 15, 2021
  • Extended: September 15, 2021

 

Individual or C Corporation? Add these 2020 filing deadlines to your calendars:

  • Regular: April 15, 2021
  • Extended: October 15, 2021

 

Nonprofit or charity? Add these 2020 filing deadlines for exempt organizations to your calendars:

  • Regular: May 15, 2021
  • Extended: November 15, 2021

 

If applicable, add these to your 2020-2020 dates to your tax calendar:

  • Last day to pay employee bonuses that qualify toward 2020 business taxes: March 15, 2021 (for accrual filers only; if you’re not sure about this, ask your tax pro)
  • #GivingTuesday 2021: November 30, 2021
  • The date you start doing business in 2021
  • The date you stop doing business in 2021
  • Deadlines for any notices from the state/IRS you receive in 2021

 

Start planning to file for 2021 today and save time and money

Business owners know there are many ways to save on taxes, but it takes a certain degree of planning to capture all that opportunity cost. A calendar of your critical tax deadlines is a huge step toward being compliant and avoiding late fees and penalties. inDinero can help you build a comprehensive strategy.

 

inDinero tax checklist

 

Quick Note: This article is provided for informational purposes only, and is not legal, financial, accounting, or tax advice. You should consult appropriate professionals for advice on your specific situation. inDinero assumes no liability for actions taken in reliance upon the information contained herein.

by Celene Robert

Content producer by day, movie guru by night, Celene Robert is a PNW native and proud owner of eight pairs of Birkenstocks. She's passionate about giving inDinero customers a voice and enabling the dreams of innovative entrepreneurs.

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