October 31, 2022
Explainer

Small business tax deadlines 2023: Requirements, due dates, & extensions

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Filing and paying taxes each year is an inevitable aspect of running any business, and unfortunately, it can also be one of the most stressful, particularly for those who aren’t adequately prepared or remain confused about their obligations. However, by planning ahead and making smart, strategic adjustments to expense management and accounting processes, small businesses and startups can move much more confidently into tax season, while avoiding any costly and time-consuming disruptions to their daily operations. 

In this article, we’ll provide a straightforward guide to the upcoming tax deadlines and requirements for businesses in 2023, and provide additional guidance as it relates to filing extensions, making quarterly estimated tax payments, and settling unpaid tax debts. 

Business federal tax return deadlines for 2023

Unlike personal income taxes, annual tax filing deadlines for small businesses and startups will vary depending on the specific type of company. In addition to identifying and planning for the relevant deadlines, businesses also need to know exactly which forms will be required based on their individual business model and classification. (For new business owners just getting started, we also recommend reviewing Ramp’s 4-step guide on how to file small business taxes.) 

Here are the specific deadlines and IRS forms required for a variety of businesses in 2023: 

Multi Member LLCs 

Deadline: March 15, 2023

IRS Form: 1065

S-corporations

Deadline: March 15, 2023

IRS Form: 1120S

C-corporations

Deadline: April 17, 2023

IRS Form: 1120

Partnerships

Deadline: March 15, 2023

IRS Form: 1065

Sole Proprietorships

Deadline: April 17, 2023

IRS Form: Schedule C + Personal tax return (IRS form 1040)

Business tax extension deadlines for 2023

There are a number of reasons that a small business or startup might require extra time to file taxes, even if merely to ensure that all relevant information submitted to the IRS is completely accurate and up-to-date. However, if your business does need additional time to file, it’s important to keep in mind that you will need to request an extension either on or before the normal annual tax deadline. 

Additionally, it’s important to remember that the taxes your business owes will still need to be paid in full by the regular deadline to avoid penalties, regardless of being approved for an extension. If for any reason your business can’t afford to pay off your full tax balance by the annual deadline, it’s possible to arrange for an installment plan with the IRS that allows you to pay down your balance over time, although additional fees and penalties will be incurred as a result. (We’ll explore these fees in more depth in a later section.) 

Here are the specific deadlines and IRS forms required when filing for an extension on business taxes in 2023:

Multi Member LLCs 

Extension Deadline: September 15, 2023

IRS Form: 7004

S-corporations

Extension Deadline: September 15, 2023

IRS Form: 7004

C-corporations

Extension Deadline: October 16, 2023

IRS Form: 7004

Partnerships

Extension Deadline: September 15, 2023

IRS Form: 7004

Sole Proprietorships

Extension Deadline: October 16, 2023

IRS Form: 4868

Hurricane Ian tax relief & extensions

Heading into 2023, businesses located in Florida that have been impacted by Hurricane Ian will now qualify for an additional extension on a variety of tax filing and payment obligations. More specifically, filing and payment deadlines that previously occurred beginning on September 23, 2022 will be postponed until February 15, 2023. This new deadline will also apply to the payment of quarterly estimated income taxes normally due on January 31, 2023. 

If you believe your business may qualify for relief or an extension due to the Hurricane Ian disaster, you can find more information related to your specific eligibility at the IRS’s official Hurricane Ian relief page here

Quarterly estimated tax payment deadlines for 2023

In addition to filing taxes annually, some businesses will be required to make quarterly estimated tax payments to the IRS. More specifically, estimated tax payments will be necessary for S-Corporations and C-corporations that can reliably expect to owe at least $500 in annual taxes, as well as individuals, sole proprietors or partnerships expecting to owe at least $1,000. 

To satisfy estimated quarterly tax payment requirements and avoid penalties, all eligible businesses will need to fill out IRS Form 1040-ES and submit along with payment on or before the following dates:

First Quarter - April 18, 2023 

Second Quarter - June 15, 2023

Third Quarter - September 15, 2023

Fourth Quarter - January 17, 2024

How are estimated quarterly tax payments calculated?

Calculating estimated quarterly tax payments can be complicated, particularly if your business’s annual income is relatively inconsistent and difficult to predict. Fortunately, the IRS does provide businesses with a worksheet to help simplify the calculations, and the overall process can otherwise benefit significantly from maintaining effective and reliable expense management and accounting practices. 

If your business’s income is consistent and you have a relatively good idea about how much you’ll owe in taxes at the end of the year, then the best method will be to simply divide your estimated annual tax liability by four, which will reveal the amount that should be paid each quarter. For example, if you expect to pay $8,000 in annual taxes, you’d simply pay $2,000 on or before the estimated tax payment deadline each quarter. 

If income is less consistent, the best approach will be to make an estimate each quarter based on what your business has already earned for the year. Put simply, you’ll look at what you’ve earned so far and then make a reasonable prediction based on that number about what your annual tax liability will be, before submitting a quarterly payment based on that estimate. 

Employment, employee, and contractor tax return deadlines

Most businesses will need to provide their employees with annual W-2 forms, which detail critical information about their employment, including taxes withheld from paychecks throughout the year. W-2s will need to be filed and made available to employees in digital or physical form by January 31, 2023, and failure to meet this deadline can result in penalties of up to $580 per employee, depending on how late the forms are sent out. 

Similarly, if your business has worked with independent contractors at any point in the tax year, you will likely need to send them Form 1099-NEC (non-employee compensation) by the same date and with the same risk of penalties for filing late.

Form 941

In addition to filing W-2s and/or 1099 forms, businesses will use IRS Form 941 to report various employment taxes including federal income tax, Social Security and Medicare, as well as wages paid to employees (including reported tips) on a quarterly basis. The deadline for filing form 941 will consistently fall on the last day of the month following the end of the relevant quarter; for example, the deadline for filing taxes related to the final quarter of 2022 will be January 31, 2023. 

Importantly, some smaller businesses with fewer employees may be eligible to pay employment taxes once a year rather than quarterly using IRS Form 944. Eligible businesses will be those with an annual employment tax liability of $1,000 or less, and the deadline for reporting will typically be the last day of the first month in a new tax year (January 31, 2023). 

Federal Unemployment Taxes (FUTA) 

Nearly all businesses with employees will also need to file and pay annual Federal Unemployment Taxes (FUTA). This applies to any business that has paid wages totaling $1,500 or more to any W-2 employee or has had one or more full or part-time employees on payroll for a minimum of 20 weeks out of the relevant tax year. The FUTA tax rate for 2022 is currently 6% of the first $7,000 paid to each employee for the calendar year. 

FUTA taxes are often filed annually using Form 940 and will be due on the last day of the first month of a new tax year (January, 31). However, if your FUTA tax liability exceeds $500 for the year, you’ll be required to make at least one quarterly payment due on the last day of the month following the end of the relevant quarter. 

Federal Insurance Contributions (FICA)

Under the Federal Insurance Contributions Act (FICA), taxes withheld from an employee’s paycheck, including income, Medicare, and Social Security, must be remitted and paid back to the IRS on a monthly or semiweekly basis. For 2022, the FICA tax rate on Social Security is 6.2% on the first $147,000, and 1.45% on Medicare. 

A business’s deposit schedule (or deadlines) for FICA payments will depend on how much the business has paid in employment taxes for the year. If your business has paid $50,000 or less in employment taxes, FICA payments will be deposited monthly, with payments due on the 15th of each month. If your business has paid more than $50,000 you’ll need to follow a semiweekly deposit schedule, with taxes on payments made from Wednesday through Friday due on the following Wednesday, and on payments made from Saturday through Tuesday due on the following Friday. 

Still owe tax from 2021? Here’s what to do

If your business still owes taxes from the 2021 tax year or has yet file a tax return, it likely won’t be the end of the world, but you’ll definitely want to take action as soon as possible to mitigate the situation. If you already filed for an extension earlier this year, the extension deadline was October 17, 2022 for submitting a late tax return. 

Importantly, the IRS charges a Failure-to-File penalty of 5% on unpaid taxes for each month (or part of a month) that a return is not filed, but this penalty will not exceed 25% of the total amount owed. Additionally, a Failure-to-Pay penalty of 0.5% on total unpaid taxes is charged for each month that the balance is not paid off, but again this penalty will never exceed 25% of the total balance. 

If you still haven’t paid, before you doing anything you’ll first want to be sure that your tax returns have been filed accurately and you’re clear on what your business still owes in unpaid taxes. (This includes ensuring you have utilized all relevant small business tax deductions.) From there, you’ll likely want to make an arrangement with the IRS to get an additional extension or set up a long or short-term payment plan. The IRS offers a variety of installment plans with different terms and conditions, so it's important to choose an agreement that puts your individual business in the best position to pay off the balance in full, and ideally within the shortest timeframe possible to minimize penalties.

If either of the above options don’t work for your business, it’s possible to seek an alternative option, such as a temporary reprieve of taxes owed due to a specific (and properly documented) financial hardship situation. Similarly, you can attempt to request an offer in compromise, which allows businesses unable to pay as the result of certain circumstances to settle their tax debt by paying a lesser amount. In either case, the IRS will need to be contacted directly before the arrangement can be approved.

Learn how Ramp can help your business prepare for tax season

Filing and paying taxes annually or throughout the year can be notoriously stressful for small business and startup owners, however much of this stress can be considerably reduced, if not entirely eliminated, by reevaluating and simplifying critical accounting and expense management processes. 

With the Ramp platform, businesses can get free access to intuitive, easily integrated tools that allow for seamless expense tracking, automatically enforced spend controls, hyper-accurate and efficient bookkeeping, and automated bill pay processes. In addition to easing the stress of tax season, Ramp’s accounting solutions also work to cut down on overall costs, removing unnecessary business spend by 3.5% on average. 

Want to learn more about how Ramp can help your company prepare for the upcoming tax season? Visit us here to learn more about our free zero-touch expense management and accounting solutions.

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FAQs
Do I have to file a business tax return?

Yes, if you run a small business or startup, you will more than likely need to file a business tax return each year. However, the deadlines and specific tax returns to be filed will vary depending on the type of organization. 

What is the due date for 2023 business taxes?

The due date for filing an annual tax return for the 2022 tax year is March 15, 2023 for Partnerships, S-corporations and Multi Member LLCs, and April 17, 2023 for C-corporations and Sole Proprietorships. 

Can I still file my business’ taxes if I missed the deadline?

Yes, you can file your business taxes after the deadline by requesting an extension. The extension period typically lasts for 6 months, and you will be charged a 5% Failure-to-File penalty on your total unpaid taxes for every month that the return isn’t filed. 

What happens if you file taxes late?

If you file taxes late, you will incur a penalty of 5% on your total unpaid taxes for each month (or part of the month) your tax return is late. However, the penalty will never exceed 25% of the total balance. 

Does an LLC pay taxes?

LLCs with more than one member will need to file and pay federal business taxes related to the company’s income. However, an LLC with only one member may only need to pay personal income taxes, as the business will not be considered as an entity separate from its owner. Per the IRS: “For income tax purposes, an LLC with only one member is treated as an entity disregarded as separate from its owner, unless it files Form 8832 and elects to be treated as a corporation. However, for the purpose of employment tax and certain excise taxes, an LLC with only one member is still considered a separate entity.”

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