Business Tax Return Deadlines: Your Guide as an Independent Financial Advisor

There are a million things to keep track of when running a business. There are customers and employees, marketing and keeping an eye on industry trends, cash flow and compliance. With these come a number of different dates to keep track of, which as a small business owner or a solopreneur can get overwhelming, fast. It’s easy to prioritize items that are more enjoyable than others (prospect lunch or update ADV … hmmm), or those that have an immediate impact on our day-to-day operations (I think we can all agree that the coffee reserves being empty is the.most.important.thing. to address! Thank goodness for Amazon Prime!) Surprisingly (ahem), tax filings tend … not to be top of mind for most business owners. It’s just one more thing on that neverending list that can wait, right?

Ding ding! This is your friendly reminder that tax filings are probably buried somewhere toward the bottom of your to-do list, and now is the time to kick things into gear if you’ve been putting it off. We’re here to help you figure out when your tax filings are due for your business, depending on the entity type. We’ll also briefly discuss what you can do to be prepared, and what happens after your filings are done. If you’re less of a carrot and more of a stick type, we’ll also touch on the not-so-good news if you miss important tax deadlines. While the American way is to have an exception to every rule (“i before e except after c”, anyone?), the tax code can be absolute - except when it’s not. 

I thought the deadline was April 15! 

The IRS follows the rules of life: there is an exception to every rule. When people think of deadlines, April 15 is the date that comes to mind. First, that deadline is for individuals and calendar-year C corporations. Second, that deadline is subject to change depending on the calendar. When April 15 falls on a Monday thru Thursday, it’s straightforward. However, weekends and holidays get special treatment under IRC §7503. 

• When April 15 falls on a Friday, “tax day” gets moved to April 18, due to the observation of Emancipation Day in Washington, D.C. (April 16) on April 15. 
• When April 15 falls on a Saturday, “tax day” gets moved to April 18, due to the observation of Emancipation Day in Washington, D.C. (April 16) on April 17. 
• When April 15 falls on a Sunday, “tax day” gets moved to April 17, due to the observation of Emancipation Day in Washington, D.C. (April 16).   

So, if you're a sole proprietorship and file your taxes on a Schedule C, then your tax deadline for 2023 (for the 2022 tax year) is April 18. The same goes for single-member LLCs, which are treated as sole proprietorships for tax purposes (unless they have made an election to be treated as a corporation). 

As we said though, there are always exceptions! For example, taxpayers in Maine and Massachusetts sometimes have an extra day to file their taxes due to the observation of Patriot’s Day on the third Monday of April. This happens when April 15 falls on a Friday or Saturday.   

Ye olde technical language

Before we proceed, it’s important to note that the tax code does not always reference specific due dates. For example, IRC §6072(a) does state that certain calendar-year returns are due “on or before the 15th day of April following the close of the calendar year” but then goes on to say that certain fiscal-year returns are due “on or before the 15th day of the fourth month following the close of the fiscal year.” As we’ve established, there are exceptions for both of these, but the takeaway here is that for fiscal year returns, the deadline is generally dependent on the end of the fiscal year. 

We’ll review the rules for the various business entities below. Keep in mind though, that as we learned above, weekends and holidays get special treatment. 

C corporation

As noted above, calendar-year C corporations have the same “default” April 15 deadline. 

However, due to the exceptions noted, this year, the deadline is April 18.

Fiscal-year C corporations fall to the “15th day of the fourth month” rule. So for example, a company with a September 30 fiscal year will have a deadline of January 15.

A company with a June 30 fiscal year will have a deadline of October 15, right? Wrong! I’ll give you a hint … another exception! Such C corporations must file by the 15th day of the third month after the end of its tax year. No, I’m not kidding, this really is the (current) rule. 

S corporation

An S corporation is subject to many different rules compared to its friend the C corporation. One of the differences is that its tax filing deadline is generally the 15th day of the third month after the end of the tax year.

In practical terms, for most S corporations, this means that they will have a March 15 deadline. 

One of the reasons for this is generally speaking, S corporations are required to operate on a calendar year basis, unless … you guessed it … an exception applies. These exceptions are outside the scope of our conversation here, but if you think this might apply to you, feel free to reach out to discuss with a friendly member of the XYTS team. 

Partnerships

If you are in a partnership, the most important thing you can do when getting started is tossing a coin to see who is going to be responsible for the taxes (just kidding!)  

As far as deadlines, partnerships are treated similarly to S corporations. Their default tax filing deadline is the 15th day of the third month after the end of the tax year. So again, in practical terms, for most partnerships, this means that they will have a March 15 deadline. Like S corporations, partnerships generally operate on a calendar year basis, following the tax year of their partners. Again, there can be some exceptions, so be sure to reach out if you are unsure. 

Note: LLCs are not a legal entity recognized separately by the IRS. Therefore, multi-member LLCs that have not made an election to be treated as a corporation are treated as partnerships for tax purposes. 

What if my business entity type changed mid-year, or terminated?

This can get tricky, so please reach out to your tax advisor if you are (or anticipate you will be) in this situation. 

For example, if you have historically been a calendar-year partnership, but the partnership ends, its final return is due the 15th day of the third month after the end of the tax year. So the deadline will likely be earlier than “normal.”

On the other hand, if you have historically been a calendar-year S corporation, and the election is terminated (voluntarily or inadvertently - which is a topic for another day), the business reverts to a C corporation. However, in this situation, the final, short-year S corporation return is not due on the 15th day of the third month after the end of the tax year. Instead, per IRC §1362(e), the due date coincides with the due date for filing the corresponding short-year C corporation return. 

These situations can get complicated, fast. The main thing to remember is that record-keeping is especially important in these scenarios. The more notice your tax advisor has of upcoming potential changes, the more help they can be. Be sure to talk to your tax advisor about what particular deadlines may apply to you in your situation.  

Before and After the Deadline 

Leading up to the deadlines 

“Just-in-time” may be a great system for managing inventory, but not so much for managing your tax filing responsibilities. The first step to making sure that your tax filings will be on track is making sure that you are keeping good financial records from day 1. If this is not your strong suit, please do not wait to ask for help. It takes much more time (and therefore, money) to go back and reconstruct records versus having them done right the first time. Pay special attention to ensure that no personal expenses sneak into your P&L, and that you have details available for your tax advisor should they need more clarification to ensure that an item is reported correctly. 

(Psst...as an XYPN advisor, you can take advantage of the services offered by XY Bean Counters!) 

Have a K-1?

If you have a partnership or an S corporation, getting the business return filed is only the first step. The return will produce Schedule K-1, which you will need, along with your updated basis schedule(s), to prepare your individual tax return. The sooner your business return is filed, the sooner you can get your individual return filed! Speaking of …  

What about extensions? 

It’s true that generally, six-month extensions are available. For Schedule C businesses and C corporations, that means October 16 for this year, and for calendar year S corporations and partnerships, that means September 15. However, there’s no sense in pushing off the inevitable if you have everything you need to get the business tax return done, especially since your individual return may need to be extended until your business filings have been completed. Keep in mind that extensions must be filed by the original due date to be valid. Also, remember that state extension rules don’t always follow federal rules, so again, it’s best to double-check with your tax advisor as to what specific deadlines and forms apply to you to avoid any unnecessary penalties (and interest). Remember, an extension to file is not an extension to pay.  

Santa brings coal; The IRS brings penalties 

Money talks, so that is what the IRS uses to get you to “talk” … err … file. There are a number of different penalties that you may be subject to, from both the federal and state perspective, but we’re going to focus on an overview of the IRS failure to file penalties here (for you nerds, that’s IRC §6651). Of course, interest is charged on penalties, so they can add up fast. While there are penalty abatement procedures, they should not be relied upon. As always, please discuss with your trusted tax advisor if you have any specific questions or concerns.  

The general failure to file penalty for 1040 (Schedule C) filers is 5% of the unpaid taxes for each month (or part of a month) that a tax return is late, capped at 25%. Note that if you are more than 60 days late, a minimum penalty of $450 or 100% of the tax owed (whichever is less) applies. 

C corporations are subject to the same penalties as 1040 filers, outlined above. 

For S corporations and Partnerships, there is a failure to file a penalty of $220 for each month or part of a month (up to 12 months) that the return is late or doesn’t include the required information, multiplied by the total number of persons who were shareholders/partners during any part of the tax year in question. This can add up fast. If tax is due, then the penalty increases to add the same 5%/25% cap noted above, along with the same minimum penalty of $450 or 100% of the tax owed (whichever is less). There is an additional penalty of $290 for the failure to furnish each related Schedule K-1s to the shareholders/partners.    

All of these dates, rules, and exceptions are giving me a headache! 

Deep breaths. As  Miguel de Cervantes Saavedra (the author of Don Quixote) observed: 

“To be prepared is half the victory."

Knowing the deadlines that apply to you allows you time to plan ahead for fulfilling your tax filing responsibilities. Consulting with your XY Tax Solutions tax professional is a great way to ensure your calendar is up to date with the deadlines that apply to you - and we may also be able to help save you money or avoid making costly mistakes when filing your tax returns this year. No exceptions! 

About the Author

Sarah is a Senior Tax Specialist with XYTS and has a diverse financial services background of over 15 years in the risk management, insurance, and tax industries. She has a Bachelor's Degree in Economics and a Master's Degree in Business Administration. She is an Enrolled Agent and is currently pursuing a Graduate Certificate in Taxation.  Sarah is passionate about financial literacy and helping others recognize the importance of tax planning. Outside of work, she enjoys hiking, music, reading, and travel.