If you have a small business in California, you probably know that it’s tax season. Here are some important tax filing deadlines for small businesses in California.
California Tax Filing Deadlines
If you have a small business in California, beyond paying federal taxes to the IRS, you’ll also have to pay California state taxes to the California Franchise Tax Board (FTB). Most businesses are responsible for a California corporate tax, a California alternative minimum tax (AMT), and/or a California franchise tax, depending on what kind of business you have. Income that passes through your business is also subject to the California state income tax. Here’s when you have to pay the state taxes that you owe.
- California Corporate Taxes - Your California corporate tax return is due on the 15th day of the 4th month after your fiscal year-end if you follow a fiscal year, and on March 15th if you don’t. You have until the next business day to file and pay if the date falls on a weekend or holiday. The California corporate tax rate applies if you are a C corporation or an LLC that chooses to be treated as a corporation and report net taxable income/profit. Without a profit, you pay a flat alternative minimum tax (AMT). If you’re paying either of these taxes, you’ll have to file a California Corporation Franchise or Income Tax Return (Form 100) with the FTB.
- California State Income Tax - This year, your California state tax return is due on April 18, 2022, due to the filing and payment deadline for the California state tax return falling on Friday, April 15th, which is Good Friday and considered a holiday. Self-employed workers, independent contractors, and unincorporated businesses in California might not have to pay state corporate or franchise taxes, but most still have to pay state income taxes. The same goes for people who earn income from pass-through entities like S Corporations and LLCs. Your income tax rate is based on which of the nine California tax brackets you fall into, and also your filing status. To file your income taxes, use FTB Form 540, the California Resident Income Tax Return.
United States Tax Filing Deadlines
The Internal Department of Revenue (IRS) requires different forms, rates, and filing dates depending on the official type of business entity of your company.
- Sole proprietorship - Business taxes for the 2021 tax year are due April 18, 2022. A sole proprietor is a business owner who keeps their business assets and personal assets tied together and pays taxes as part of their personal income tax return. If you don’t register your small business as any particular type, a sole proprietorship is the default structure.
- Partnership - Business taxes for the 2021 tax year are due March 15, 2022. A partnership pays taxes as part of each partner’s personal income tax return and partners are liable for any business debts.
- Limited liability company (LLC) - Business taxes for the 2021 tax year are due April 18, 2022. For federal taxes, an LLC is much like a partnership. You can file to be organized as an LLC with the state as long your business meets the requirements.
- S corporation - Business taxes for the 2021 tax year are due March 15, 2022. An S corporation complies with some of the typical corporate obligations and issues, even though it’s usually smaller. Owners must pay taxes on their portion of the business income as part of their personal tax return.
- C corporation - Business taxes for the 2021 tax year are due April 18, 2022. If you’re fully incorporated, a C corporation is the default structure. C corporations file and pay a corporate tax return instead of passing income onto the owners’ personal taxes.
Tax extensions - If you aren’t ready to file your tax paperwork for any reason, you can apply for a tax-filing extension. You must apply for a tax extension no later than your typical tax deadline. Sole proprietorships, C corporations, and single-owner LLCs must apply for an extension by April 18, 2022, which extends the tax-filing deadline to October 17, 2022. Partnerships and S Corporations must apply by March 15, 2022, which extends their tax-filing deadline to September 15, 2022. A tax extension only extends your filing deadline, you must still pay your estimated taxes.
If you want to learn more about taxes, read our article, “Tax Deductible Marketing Expenses That All Small Businesses Should Keep In Mind When Filing Taxes”, or to find out more about marketing, contact us.
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