All businesses except partnerships must file an annual income tax return. Partnerships file an information return. The form you use depends on how your business is organized. Ex: LLC, S Corp, Corp, Partnerships and Sole proprietorships. The federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. This is officially called Estimated Tax.
Jan. 31, 2023 employers must send W-2 forms to employees and send certain 1099 forms
March 15, 2023 partnerships, multi-member LLCs, and S corporations must pay taxes.
April 18, 2023 C corporations must pay taxes.
Sept. 15, 2023 deadline for extended partnership and S corporation returns.
October 16, 2023 last deadline for extended C corporation returns
When your company is ready to hire employees, you as the employer have certain responsibilities like employment tax, that must be paid and forms you must file. Employment taxes include the following:
Social security and Medicare taxes
Federal income tax withholding
Federal unemployment (FUTA) tax
All employers are required to make federal payroll tax payments to the government and at the same time, file a report. Companies that have direct employees or hire contractors are required to yearly report to the IRS the payments made to those employees or contractors using the forms W2 and 1099 respectively. Rules can be a bit complex for a small company owner, that is why this service is often outsourced.
Handling payroll tax responsibilities involves the following:
1. Federal and state taxes are paid and reported
2. Income reporting (forms W2), amounts withheld (forms W4), and amounts paid on behalf of employees (forms 940 & 941) and contractors (Form 1099) are correct and file or send on time.
3. Required federal and state records are kept
Generally, you must pay taxes on income, including self-employment tax, by making regular payments of estimated tax during the year. Even if you made partial payments throughout the year, you may still need to pay any tax due when you file your annual tax return. These payments are like the tax withheld from any individual’s pay/salary.
Payments for estimated taxes are due on four different quarterly dates throughout the year.
1Q — April 18, 2023.
2Q — June 15, 2023.
4Q — January 15, 2024.
Self-employment tax accounts primarily for Social Security and Medicare taxes for individuals who work for themselves. It is like the Social Security and Medicare taxes withheld from the paychecks of direct company employees.
Self-employed individuals must figure the amount using Schedule SE (Form 1040 or 1040-SR). Also, you can deduct the employer-equivalent portion of your SE tax in figuring your adjusted gross income. Wage earners cannot deduct Social Security and Medicare taxes.
The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security and 2.9% for Medicare.
Are taxes imposed on goods, services and activities. Excise taxes may be imposed on the manufacturer, retailer or consumer, depending on the specific tax. Examples of excise taxes for which may include:
The employer FICA rate is 7.65% in 2023. Employees pay an additional 7.65% FICA tax, and self-employed workers pay the full 15.3%
The federal income tax filing deadline is April 18, 2022. If you need more time, you can get an automatic income tax extension by filing IRS Form 4868. This gets you until Oct. 17, 2022, to file your tax return.
No, when you file the IRS Form 4868 you get more time to present the taxes, but it doesn’t give you more time to pay your taxes. Anything you owe after the deadline is subject to interest and a late-payment penalty — even if you get an extension. You might be able to catch a break on the late-payment penalty if you’ve paid at least 90% of your actual tax liability by the deadline and you pay the rest with your return.
If you do not make any payments or skip a payment during the fiscal year, the IRS might charge you a penalty. The IRS can charge you a penalty even if you are owned a refund.
Fill out the contact form below to schedule your appointment!
