It’s that time of year again. The beginning of a new calendar year means every business owner needs to put some thought into tax filings. Beyond filing for your own company, you also have fast-approaching responsibilities pertaining to your employee’s taxes and their ability to file.
It can all feel overwhelming, but laying out your to-dos helps to simplify things. With that in mind, we teed up a list of upcoming deadlines. If you do the things on this list by the applicable dates, you should be in good shape to navigate this tax season with relative ease.
One caveat here: we’ve tried to touch on tax requirements no matter where you operate. But you should definitely have a conversation with your accountant in the next few weeks on this topic. They can make you aware of any deadlines you need to know about based on your specific business and where and how it operates. This way, you have plenty of time to gather up and organize the required documentation for all of your company’s required filings.
ASAP: Check state deadlines
While a lot of states follow the IRS’s lead and require tax filings by mid-April, not all do. Usually, there’s not a ton of deviation from the IRS’s date — Iowa requires corporate income taxes by April 30, for example. Still, though, knowing the deadline for any state taxes you need to file helps to set you up for success this spring.
Keep in mind that if you have remote workers in other states, their location might establish a tax nexus in that state. Talk with your accountant to figure out which states you should be looking into filing requirements and deadlines for.
By 1/31: Get W-2s and 1099s squared away
You only have until the end of January to issue W-2s to your employees and 1099s to your contractors. If you’re not sure who should get which paperwork, we have a blog to help you clarify contractors versus employees.
Did you issue any non-statutory stock options to employees this year? If so, you need to make sure that gets reported on their W-2 by putting Code V in Box 12. If you’re working with a payroll company, inform them of any affected employees so they can mark that on their W-2s before they get sent out. Gusto, for example, has a guide to help you navigate this with them.
A big change went into effect for your contractors for the 2023 tax year. Now, you have to report and 1099 any wages above $600 (a pretty dramatic difference from the $20,000 reporting threshold in past years).
By 3/1: Deal with your Delaware to-dos
Since so many tech companies are incorporated in Delaware, we wanted to call out deadlines specific to the state. By March 1, you need to both pay your franchise tax and file your annual report with the Delaware Division of Corporations.
You might get an email from your registered agent notifying you that they can handle this for you — for a fee. Disregard that. You can complete this payment and filing for free through the Division of Corporation’s website.
Before you knock this out, though, sit down with your CPA, especially if you fundraised or issued shares in 2023. Calculating the franchise tax you owe can get complicated and your accountant can work with you to ensure you pay the right amount.
By 4/15: File your taxes with the IRS and state taxes
Because federal and state taxes function somewhat differently, let’s break this into two to-dos for you.
As we mentioned before, many states take a page from the IRS’s book and make their state corporate income taxes due on April 15. Work with your accountant to figure out which states you need to complete this filing for.
If you’re incorporated in Delaware, don’t assume that the aforementioned franchise tax payment ticks your tax box for the state. You may still be required to pay corporate income taxes, and those are due by April 15.
If you’re a calendar-year filer, Form 1120 for your corporation’s taxes is due on April 15 this year. You also need to send payment to the IRS for any income taxes your company owes by that date.
Because taxes are usually pretty complicated for tax startups, don’t drag your heels on this one. We advise sitting down with your accountant in February or March to start sorting out your filing and the taxes you owe. Doing this early means you have more time to explore tax savings, including the R&D tax credit. Starting early can pay off — literally. That R&D credit could help you take as much as $500,000 off your bill from the IRS.
Buying Time: Filing an Extension
If you’re reading this blog and it’s pretty darn close to the middle of April, you do have a way to buy yourself some time. By filing Form 7004 (the Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns), you can get a six-month extension for your filing.
Note that last bit; it’s key. This is an extension just for your filing. You still need to pay any taxes you owe by April 15. Anything you pay after that date can be subject to late fees and interest. And since interest rates have been so high recently, we’ve seen clients be subject to late costs of as much as 8% of their total taxes owed.
While you still need to make a tax payment by April 15, the extension can be incredibly helpful because it saves you from losing the opportunity to claim the R&D tax credit.
This is a pretty broad overview, but we hope to demystify the coming tax season. For more guidance to help you sail smoothly through it, check out our six tips for prepping your books and our tax planning tips from the end of 2023.
Long story short, now’s the time to start thinking about filing your 2023 taxes. Set up a chat with our team of tech startup tax specialists so you can get yourself squared away for this year’s filing season.