2020 Tax Tips and Deadlines

What does the month of March mean to you? For some, it’s St. Patrick’s Day or spring break. But if you’re a small business owner, you’ll need to know the following 2020 March tax deadlines. And April? Don’t be “fooled.” It’s all about meeting your IRS obligations, filing for an extension, or setting up an installment plan.

If you’re applying for a small business loan, it’s particularly important to hit all of those deadlines or show proof that you filed an extension.

See if you pre-qualify!

Tax Form Deadlines 2020

Below are the dates you need to know and the forms* that are typically requested when applying for a small business loan.

March 16, 2020 is the IRS filing deadline for the following:

This is the date for Partnerships/LLCs to file business tax returns. If your LLC is taxed like a partnership, then file Form 1065. If taxed like a corporation, file Form 1120.

1120

Use this form to report the income, gains, losses, deductions, credits, etc., of a domestic corporation or other entity for any tax year covered by an election to be an S corporation.

1065

Partnerships file an information return to report their income, gains, losses, deductions, credits, etc. A partnership does not pay tax on its income but “passes through” any profits or losses to its partners. Partners must include partnership items on their tax or information returns.

Filing for an Automatic Extension

7004

If necessary, you can apply for a six-month extension, but the extension is for the filing, not the payment, of taxes. Interest will apply to any overdue taxes.

April 15, 2020 is the IRS filing deadline for the following:

April 15 is not just the deadline for individuals and first quarter estimated taxes. This is also the deadline for corporations who will use Form 1120. Certain corporations are also eligible to receive a six-month tax extension from this deadline.

1040

Form 1040 is used by U.S. taxpayers to file an annual income tax return.

1120

Domestic corporations use this form to report their income, gains, losses, deductions, credits and figure their income tax liability.

4868

A U.S. citizen or resident files this form to request an automatic extension of time to file a U.S. individual income tax return.

June 15th, 2020

Tax year 2020 second-quarter estimated tax payments are due.

Partnerships to file Form 8813 quarterly payment voucher and pay any tax due.

September 15, 2020

Third quarter estimated taxes are due on this date, as are tax returns for anyone who received the six-month extension.

October 15, 2020

Any corporations that received a six-month extension from April 15 will have their tax returns come due on this date.

How to Request a Monthly Installment Plan

Use Form 9465 to request a monthly installment plan if you cannot pay the full amount you owe shown on your tax return (or on a notice sent to you by the IRS).

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Employer Taxes to File in 2020

If you have employees, there are employer taxes to file and deadlines to meet. There are also tax-related items you must send out to individuals and organizations that you paid money to in the last year. Additionally, you also must file forms to the IRS about these payments.

Here are some of the key employer taxes you need to be aware of:

  • Income tax you withhold from your employees’ wages or from nonpayroll amounts you pay out
  • Social Security and Medicare taxes, referred to as FICA taxes, you withhold from your employees’ wages and the Social Security and Medicare taxes you must pay as an employer
  • Federal unemployment (FUTA) tax you must pay as an employer

All of these employer taxes have tax forms to submit. Find more information and links on the IRS website here: Employment Tax Forms.

Business Filing Tax Tips When Applying for a Small Business Loan

The SmartBiz Loans® team has compiled tax tips for when you apply for a small business loan from a bank in the SmartBiz® network. If you have questions about taxes and your application, please reach out to your SmartBiz Relationship Manager.

  • Prepay taxes if self-employed.
  • If underpaying, file extensions on time and pay estimated taxes owed to avoid or reduce additional tax fees.
  • Obtain E-File Activity reports to confirm taxes have been filed.
  • If you cannot satisfy the full amount owed, a 9465 installment agreement should be filed as soon as possible to avoid further late fees.
  • After filing, keep clean PDF copies of the returns neatly organized in a safe place for quick access when applying for loans.
  • Create an account on IRS.gov to check balances of past taxes.

Self-File or Hire a Professional?

Should you go solo or work with a professional to file your taxes? There are many factors to consider including the complexity of your tax situation, the time required to gather documents and the cost. Read this article from the SmartBiz Small Business Blog for more information and insight from real small business owners: Small Business Taxes: Self-File or Use a Professional?

Whether you choose to self-file or hire a professional, the H&R Block blog has a list of the information you’ll need to prepare your taxes:

  • Income
  • Gross receipts from sales or services
  • Sales records (for accrual-based taxpayers)
  • Returns and allowances
  • Business checking/savings account interest (1099-INT or statement)
  • Other income
  • Cost of goods sold (if applicable)
  • Inventory
  • Beginning inventory total dollar amount
  • Inventory purchases
  • Ending inventory total dollar amount
  • Items removed for personal purposes
  • Materials and supplies
  • Expenses
  • Advertising
  • Phones (landline, fax or cell phones related to business)
  • Computer and internet expenses
  • Transportation and travel expenses
  • Local transportation (Mileage log or receipts for public transportation, parking, and tolls)
  • Travel away from home (Airfare or mileage/actual expense if drove, hotel, meals, taxi, internet connection, tips, etc.)
  • Commissions paid to subcontractors (File Form 1099-MISC and 1096 as necessary)
  • Depreciation
  • Business insurance
  • Interest expense
  • Professional fees (Lawyers, accountants, and consultants)
  • Office supplies
  • Rent expense
  • Business-use vehicle lease expense
  • Office-in-home (Detailed information here: How to Take the Home Office Tax Deduction)
  • Wages paid to employees
  • Other expenses

Getting Loan Ready

In addition to having all of your ducks in a row when it comes to taxes, there’s another great way to make sure your small business is loan ready. SmartBiz Advisor® helps you learn how banks typically evaluate your business and recommends ways to help you increase your credit and financial health, so you have a better chance of accessing funding when you need it.

Our proprietary Loan Ready Score, built by analyzing thousands of small business financials with our intelligent platform, helps you learn how your business stacks up when you apply for a low-cost small business loan. Sign up for SmartBiz Advisor here. It’s free!

*This information is provided for educational purposes only. Hiring a tax professional is the best way to manage and understand all your obligations, especially when there are changes in legal requirements.

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