Tax deadlines come at you fast when you're running a startup. Don't be caught off-guard. Learn about key deadlines for forms like 1099-NEC, San Francisco Business Taxes, and Delaware Franchise Taxes so you can plan ahead.
Tax deadlines come at you fast when you're running a startup. Don't be caught off-guard. Learn about key deadlines for forms like 1099-NEC, San Francisco Business Taxes, and Delaware Franchise Taxes so you can plan ahead.
Tax season: the phrase that often evokes a sense of dread, especially for startups grappling with multiple deadlines, tax forms, and compliance issues. While individual taxpayers and established corporations generally have their eyes on the usualApril 15 filing date for federal and state income taxes, startups have a broader spectrum of deadlines to juggle throughout the year. Ignoring these can result in penalties, fines, and in extreme circumstances, even imprisonment.
Taking proactive steps, such as choosing a knowledgeable tax advisor well in advance of the tax season and working diligently with them year-round, can simplify the process and ensure timely and accurate filings.Whether you're a startup founder who's perpetually crunched for time or someone diligently setting reminders for the upcoming year, this comprehensive guide will delve into crucial tax deadlines you need to keep on your radar.
As a startup, you'll likely engage with various vendors, contractors, and freelancers based in the United States. For each of these individuals or entities that you pay $600 or more during the fiscal year, a 1099-NEC form needs to be filed. The classification encompasses sole proprietors, partnerships, and LLCs, among others.
These forms serve multiple purposes. Firstly, they assist the IRS in cross-verifying the income that taxpayers declare, helping to reduce fraud. However, there is no automatic 30-day extension for filing 1099-NEC forms. You must formally request an extension by filling out, signing, and mailing a specialized form to the IRS, which can be particularly cumbersome as electronic submissions are not accepted for this specific extension.
There are also some exceptions and conveniences. For example, if you engage vendors or freelancers who operate outside the U.S., you don't have to file 1099-NEC forms for them. Similarly, if you've paid these parties through a third-party payment platform like PayPal or any form of plastic money, the onus to report these transactions falls on the payment platform or card issuer, not on your startup.
In-house solutions like Expensify for reimbursements or payroll providers like Gusto and Zenefits often offer services to file these forms on your behalf. However, confirmation from these providers is advisable.Another critical element is obtaining taxpayer identification numbers (TIN)from your U.S.-based vendors, contractors, and freelancers, typically via a W-9form, for correct 1099-NEC filing.
Businesses incorporated in Delaware need to file an annual report and pay a franchise tax, regardless of whether they've turned a profit or not. This is also applicable to partnerships and LLCs, though they are exempt from the annual report and pay a flat fee of $300. The method for calculating your franchise tax can vary, allowing you to pick the least expensive option.
Unlike corporations, partnerships don't pay federal income taxes; instead, the tax liability is "passed through" to the individual partners. Depending on the state you operate in, the type of partnership you're involved in, and your share in the business, you might havev arying tax obligations. The critical forms here are Form 1065 and ScheduleK-1, which detail your partnership's earnings and your share in them.Extensions are possible but need to be explicitly requested.
Extension Deadline: October 15
Unlike S Corporations and partnerships, traditional corporations are required to pay corporate income tax. If you're running such a corporation, make sure you file by April 15th or request a six-month extension using Form 7004.
Tax season need not be aPandora's box of stress and surprises for startups. Advance planning, perhaps with the help of a seasoned tax provider like Uplinq, can make the process far less painful. Their suite of services, which includes startup bookkeeping, back office support, and CFO services, is built to evolve with your business.
Want to delve deeper? For a more exhaustive guide on navigating these tricky waters, be sure to check out our "Guide to NavigatingTax Deadlines."
By understanding the different tax obligations and deadlines that may apply to your startup, you can budget better, avoid costly penalties, and maintain compliance with both federal and state tax authorities. Mark these deadlines on your calendar and make tax season a breeze rather than a burden.