Managing a business means acting, reacting and making dozens of important decisions every day.
From quick choices in the moment, to dealing with standard operating procedure, it’s easy to lose sight of what’ll happen next week, let alone next month. If planning for the “long-term” feels like it’s next to impossible, we get it. It’s certainly easier to make decisions and react to what’s happening right in front of you, than it is to think about something a year into the future.
But you know the inevitable outcome of getting caught in this cycle. Tax season sneaks up. You scramble to reconcile your books and run your business at the same time. Long nights. Overwhelm. Frustration. Where is that receipt from that one lunch in January last year?
But this year will be different. This year, you’ll be organized.
That’s why we’ve created the 2018 Small Business Tax Calendar to help you stay on top of important IRS due dates throughout the year, and keep ahead of the federal government.
To get the most out of 2018 Tax Calendar, you may need to rethink or create new habits around managing the administrative side of your business. However, doing so can help you create better administrative hygiene and minimize your risk of accruing unnecessary penalties and interest costs.
A process for tax planning
Proper tax planning requires you to submit tax documents on a variety of due dates.
Start this process by checking with your CPA to confirm the due dates for the upcoming tax year. Create an system to remind you when these dates are coming up, and include enough lead time to file the tax documents in a timely manner. You can input new alerts into your calendar software, or write the dates in your planner.
Consider outsourcing payroll
Many businesses can save time by outsourcing the payroll process to a third party, such as Intuit Payroll.
Payroll is complicated for several reasons:
- Employee records: Each worker’s payroll information is different, including different salaries, hourly rates, tax withholdings, and benefit payments. Payroll information also changes, as employees are promoted or have a change in family status. Maintaining these records is time consuming.
- Tax tables: Both federal and state income tax rates change frequently, and companies with employees in multiple states must withhold income taxes for more than one state. In addition, you may need to withhold income for city and local taxes. This makes calculating gross and net pay even more difficult.
- Tax reporting: The federal, state and city income tax returns are all different, and you may need to file a dozen or more tax forms each month and year.
For all of these reasons, you may save time and costs by outsourcing the payroll function to a third party firm. These companies can manage both payroll processing and tax reporting, and they make the necessary changes to their software as the tax laws change.
2018 tax calendar
Here are the important due dates you need to know for 2018, listed in chronological order:
January 16, 2018
Deadline for 4th quarter estimated tax payments for 2017.
Who’s it for?
Self-employed individuals or businesses that need to make quarterly tax payments. These payments ensure that you pay a large percentage of your estimated tax liability during the year, rather than in one payment when your tax return is filed.
January 31, 2018
Deadline to send out W-2 for your employees and 1099s for your contractors, and file to the IRS (either electronically or on paper). This document explains the difference between employees and independent contractors from an IRS point of view.
Who’s it for?
Form W-2: If your business has employees, you will need to submit copies of their W-2s to the IRS.
Form 1099: If your business employs independent contractors, you will need to submit copies of their 1099s to the IRS. (Read below for exceptions.) Here’s how to prepare 1099s for your contractors.
- To determine which form to send, reference this 1099 vs. W-2 calculator.
- Beginning with 2016 tax returns, the IRS has changed filing deadlines for W-2s and 1099s, combining them into a single deadline earlier in the year.
- If you’re filing Form 1099-MISC and Box 7 (Nonemployee Compensation) is empty, you may file the return on February 28.
February 15th, 2018
Deadline to Give 1099s to all 1099 contractors who received payment in 2017
February 28, 2018
Deadline for mailing mail out Forms 1099 to the IRS on paper. (Provided you’re not required to meet the earlier February 1 deadline.)
Who’s it for?
Form 1099: If your business employs independent contractors, you will need to submit copies of their 1099s to the IRS.
March 15, 2018
Who’s it for?
Form 1120S: If you’re an S-corporation (S-corp), which means that the profits and losses of the S corp are passed through to each shareholder’s tax return.
Form 1065: If your business is in a partnership, which means that the profits and losses of the partnership are passed through to each partner’s tax return.
- This is also the final deadline to request a 6-month automatic extension. To do so, you must file Form 7004 and cite an estimated tax.
- If you want to register your business as an S-corporation beginning in the 2018 calendar year, you must file Form 2553 by this date.
- Read more about the difference between C-corp and S-corp.
March 31, 2018
Deadline for electronic filing of Forms 1098 and 1099s (with the exception of 1099-MISC).
April 17, 2018
Form 1120: If you’re a C-corporation (C-corp), which is subject to double taxation. A C-corp files a tax return and pays taxes on profits. After-tax profits may be paid to shareholders in the form of a dividend. Dividend income is taxed on the shareholder’s tax return. As a result, C-corp earnings are taxed twice.
This is also the final date to make payments for the 2017 calendar year, and to deposit the first installment of taxes for 2018. Deadline for 1st quarter estimated tax payments for 2018.
- Last day to make a contribution to your traditional IRA, Roth IRA, Health Savings Account, SEP-IRA, or solo 401(k) for the 2017 tax year.
- Individuals: To request an automatic 6-month extension, file Form 4868.
Who’s it for?
Forms 1040, 1040A, 1040EZ: If you’re an individual filing your earnings for 2017.
April 22, 2018
Deadline for resubmitting or paper-filing a rejected federal return that was originally e-filed by the April 17 deadline, if you did not file an extension.
Note: Although October 20 is the last day to resubmit a rejected return, taxpayers who owe taxes and want to avoid the late-filing penalty have until April 22.
April 30, 2018
Deposit FUTA tax by the last day of the first month following the end of the quarter.
If the due date for making your deposit falls on a Saturday, Sunday, or legal holiday, you may make your deposit on the next business day.
June 15, 2018
Deadline to make estimated tax payments for the 2nd quarter of 2018.
September 17, 2018
Deadline to make estimated tax payments for the 3rd quarter of 2018.
Partnerships and S-corporations
If you requested an extension, this is your final deadline to file corporate tax returns for 2017 using Forms 1065 and 1120S.
October 15, 2018
If you requested an extension, this is your last day to file tax returns for 2017 using Forms 1040, 1040A, and 1040EZ.
If you requested an extension, this is your last day to file tax returns for 2017 using Form 1120.
This is the final day the IRS will accept an electronically filed tax return. If you miss the deadline, you will have to file by paper.
January 15, 2019
Deadline to make estimated tax payments for the 4th quarter of 2018.
Common taxpayer misconceptions
As you think about tax planning, consider these common taxpayer misconceptions:
- Realized gains vs. recognized gains: If you buy an asset and sell it for more than you paid for it, you have a realized gain. If, for example, you buy 100 shares of IBM common stock at $10,000 and sell the shares for $15,000, your realized gain is $5,000. A recognized gain, on the other hand, means that you owe taxes on the gain. Not every realized gain is recognized for tax purposes, and there are dozens of examples. In some cases, you can offset a realized gain with a realized loss and not owe taxes on the gain. This can impact both business and personal tax returns.
- Marginal tax rate: Your marginal tax rate is not the tax you pay on all of your income. Instead, the marginal tax rate is the tax you pay on your next dollar of income. The IRS tax tables provide a different tax rate for different levels of income. For 2017, taxpayers pay at 10% tax rate on income from $0 to $9,325, and a 15% rate on income from $9,326 to $37,950. Assume, for example, that your salary was $37,950. If you earned $10 more, you would pay 25% on those next $10. Your marginal tax rate is 25%.
- Alternative minimum tax (AMT): Some individual taxpayers must calculate their tax liability twice, because of AMT. The alternative minimum tax was put in place to assess taxes on certain transaction that would otherwise not be taxed. A good example is income earned on certain municipal bond income. Assume that you calculate your taxes and come up with a $15,000 tax liability, and the tax law requires you to calculate AMT. The AMT calculation will add municipal bond income into tax calculation- income that is tax-exempt outside AMT. If the AMT tax calculation generates a higher tax liability, you pay taxes on the larger amount.
Make sure that you understand how each of these issues impacts your personal or business tax return.
Invest the time to plan
Invest the time that’s necessary to calculate your taxes, make payments, and file the returns on time. Proper planning can help you avoid interest costs and penalties down the road.
Ask a CPA to help you with this process.