2021 Federal tax deadlines for your small business
Update: 2021 Income Tax Filing Deadline Moved to May 17
The IRS is once again moving the income tax filing deadline to allow more time to complete and submit your tax return and to pay any taxes you may owe. This year, individual taxpayers, including sole proprietors and single-owner LLCs, who normally have to file their tax return by April 15 will have until May 17, 2021 to file their 2020 taxes.
The change this year is due to the fact that there are provisions in the American Rescue Plan, signed into law on March 11, 2021, that impact 2020 tax returns. These include:
- A provision to make the first $10,200 of unemployment compensation free from income tax for those who earned less than $150,000 for the year. Many people collected unemployment last year, including many freelancers, contractors, and sole proprietors, so the fact that the first $10,200 won’t be taxed is a big break for them.
- A reduction in the amount many will pay for their insurance under the Affordable Care Act, often referred to as Obamacare. This may result in a change in the premium tax credit, affecting the 2020 tax return.
Note that this change applies to federal income tax returns only. Check with your state department of revenue for updates on your state’s tax filing deadline.
Many businesses, including most S corporations and partnerships, have a tax filing deadline of March 15. This deadline is unchanged, since the change was announced after this deadline passed. The April 15 deadline for C corporations is also unchanged.
Your small business tax checklist for 2021
It may feel like you just finished your 2019 business income taxes, but it’s already time to start thinking about filing your 2020 taxes. The good news is, this year’s tax season will look a little more ‘normal’ than last year’s. But there are still a few things to look out for.
Whether you've started your first company this year or you are a veteran entrepreneur, your business might be subject to a variety of federal taxes. Required tax filings depend on your industry, annual revenue, and number of employees.
Most businesses and self-employed individuals must submit estimated tax payments quarterly and file an income tax return annually. Filing dates depend on whether you operate a corporation, partnership, S corporation, or sole proprietorship.
Sole proprietorships use the same tax schedule as individuals, so 2020 returns are due on April 15, 2021. If your business is an S corporation or a partnership, the return is due on March 15, 2021. Corporations can have various tax filing deadlines, and it should be defined in your corporate resolution.
Related: Bookkeeping for small businesses
State income tax due dates can vary. Check with the tax collection authority in your state for the filing and payment deadline in your state.
Payroll withholdings and unemployment tax payments are submitted semi-weekly or monthly depending on your filing status. Employers must document deposits and distribute year-end tax documents to employees.
Tax tip: Businesses were given the option to defer withholding the employee’s share of payroll taxes on wages paid between September 1, 2020 and December 31, 2020, in order to give employees more cash in their paychecks. You also had the option to defer the employer’s share of payroll taxes beginning March 27, 2020.
If you withheld payroll taxes during this period, they need to be paid by April 30, 2021. For the first four months of 2021, you’ll need to withhold additional payroll tax from employees’ checks to cover the amount that was deferred last year. Deposit these taxes according to your regular payroll withholding schedule.
Certain businesses, including manufacturers, retailers, and trucking companies, are subject to excise tax. Depending on industry-specific requirements, excise tax is paid monthly, quarterly, or annually.
The following deadlines are geared toward small businesses that follow a calendar-year reporting system. Additional information, including schedule modifications for fiscal-year tax filters, appears in IRS Publication 509.
Tax filings for wages and non-employee compensation
By January 31, employers must distribute paper copies of appropriate tax forms to individuals who received cash payments during 2020 including wages, non-employee compensation, dividends, royalties, and profit-sharing distributions. Alternatively, electronic files can be delivered with the recipient's consent. Additional copies must be submitted to the Social Security Administration at the same time. The January 31 deadline applies to the following tax documents:
- Forms 1097, 1098 and 1099
- Forms 3921 and 3922
- Forms W-2 and W-2G
Small businesses have until February 28 to send corresponding copies to the IRS. Employers may also be required to submit Form 1096, Annual Summary and Transmittal of U.S. Information Returns, and Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. For electronic filings, the deadline for these filings is extended until March 31.
Tax tip: If you received a PPP loan in 2020 and it has been forgiven (or you can reasonably expect it will be forgiven) the expenses you paid with the proceeds of the loan, such as employee wages and rent, are not deductible expenses on your tax return. If your loan is not forgiven, the expenses you paid with its proceeds are deductible.
Employment Taxes and Payroll Withholdings
Based on tax liability as reported on Form 941, Employer's Quarterly Federal Tax Return, small businesses must deposit employment taxes monthly or semi-weekly. Items subject to this requirement include federal income tax, federal unemployment (FUTA) tax, and Social Security/Medicare (FICA) withholdings. Additionally, employers must report their payroll withholdings quarterly or annually using IRS Form 941, 943, 944, or 945. Key deadlines for Form 941 are April 30, July 30, October 29, 2021, and January 31, 2022. All other forms in the 940 series are due on the last day of the first month after the end of the calendar year (January 29, 2021):
- Form 940, Employer’s Annual Federal Unemployment (FUTA) Return
- Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees
- Form 944, Employer’s Annual Federal Tax Return
- Form 945, Annual Return of Withheld Federal Income Tax
See the Alert above for special circumstances around payroll tax withholding for 2020.
Income Tax Returns for Partnerships and S Corporations
If your business is classified as a partnership or an S corporation, you must submit your tax return on March 15 or the 15th day of the third month after the end of your organization's tax year. Partnerships must complete Form 1065, which is used to generate a Schedule K-1 earnings statement for each partner. For S corporations, Form 1120S is needed to prepare the Schedule K-1.
Partnerships and S corporations may request a six-month extension by submitting Form 7004 along with a deposit equal to the amount of estimated tax owed. In this case, the annual tax return along with interest and penalties will be due on September 15.
Corporate income tax returns
Companies have until April 15, 2021 to submit corporate tax returns for income received in 2020. Businesses may use Form 1120 or request a six-month extension by filing Form 7004 and submitting a deposit for the amount of estimated tax owed. The first quarterly estimated tax payment of the year is also due on this date.
If your business requests an extension, you have until October 15 to submit your income tax return using Form 1120. You'll be required to pay penalties, interest, and any remaining tax at that time.
2021 Tax filing deadlines for estimated income tax
Businesses must calculate their quarterly income tax liability using the worksheet Form 1120-W. Quarterly estimated income tax payments for corporations are due on the following dates:
- First quarter: April 15
- Second quarter: June 15
- Third quarter: September 15
- Fourth quarter: December 15
Federal excise tax requirements for small businesses
Federal excise taxes apply to a number of different products and industries. Filing requirements vary depending on the nature of your business.
- Form 720, Quarterly Federal Excise Tax Return, applies to retailers, manufacturers, communications companies, and travel services. It's filed quarterly, with this year’s due dates falling on April 30, July 30, October 29, 2021, and January 31, 2022.
- Companies that accept wagers must file Form 11-C, Occupational Tax and Registration Return for Wagering, before accepting any bets, and Form 730 for every subsequent month.
- Companies that operate heavy highway vehicles must file Form 2290 by the last day of the vehicle's first month of service. For subsequent filings, the excise tax period begins on July 1 and ends on June 30.
Find more information about when to file taxes 2021
This guide includes an overview of the 2021 tax filing deadlines that apply to small businesses. Your company may also qualify for tax credits and deductions on essential expenses, such as business insurance, which may reduce your tax burden. If you have specific questions about when to file taxes in 2021, additional information is available online through the IRS Small Business and Self-Employed Tax Center.