Business Tax Archives - Brenden Kelley Law

5 Key Tax Deadlines for Businesses in 2023

by Brenden | Feb 13, 2023 | Business Law

As a business owner, staying on top of your tax obligations is crucial to avoid costly penalties and ensure compliance with federal and state tax laws. With different filing deadlines for various business structures and types, it’s important to know when your tax returns and estimated tax payments are due. Here are the key tax calendar dates to watch for in 2023.

1) Jan. 31, 2023: Provide Tax Forms to Employees and Contractors

As an employer, you must provide tax forms to any employees or independent contractors you hired the previous year. This includes W-2 forms for employees and 1099-NEC or 1099-MISC forms for independent contractors. The deadline for providing these forms to recipients is January 31, 2023.

2) March 15, 2023: Business Tax Returns for Partnerships, S Corporations, and LLCs

If your business is a partnership, S corporation, or LLC taxed as a partnership, you must file your tax return by March 15, 2023, if you follow the calendar year. However, if your business’s tax year doesn’t start on January 1, you’ll need to follow the IRS fiscal year due date. This is also the deadline to file Form 2553 to elect S corporation status for tax year 2023.

3) April 18, 2023: Tax Returns for C Corporations, Sole Proprietorships, and Individuals

This is the deadline for C corporations, sole proprietorships, single-member LLCs or LLCs taxed as corporations, and individuals to file their tax returns. Additionally, this is the last day to make 2022 contributions to traditional and Roth IRAs.

4) Oct. 16, 2023: Extended Individual Tax Return Deadline

If you received a filing extension on your 2022 income tax return, your extended individual return is due on this date.

5) 2023 Quarterly Estimated Tax Payment Deadlines

If you’re self-employed or receive any form of income that requires you to pay estimated taxes, here are the estimated tax due dates for 2022:

April 15, 2023 – Deadline for 2022 Q1 estimated tax payments
June 15, 2023 – Deadline for 2022 Q2 estimated tax payments
Sept. 15, 2023 – Deadline for 2022 Q3 estimated tax payments
Jan. 15, 2024 – Deadline for 2022 Q4 estimated tax payments

Note that if any of the above dates fall on a weekend or federal holiday, the payment deadline falls on the next business day instead.

How to File a Tax Extension as a Business Owner

If you need more time to file your taxes, you can apply for a tax-filing extension. This extension will give you an extra six months to file your return. However, a tax extension only extends your filing deadline, meaning you still need to pay any estimated tax payments on your business’s tax deadline. Here’s how to file a tax extension for your business:

Sole proprietors can request a tax extension using IRS Form 4868.
Partnerships, S corporations, and C corporations can request an extension using IRS Form 7004.

Make sure to pay your estimated taxes on time to avoid any late fees!

Staying on top of tax deadlines is essential for business owners. By keeping track of these key dates, you can avoid penalties and ensure your business stays in compliance with federal and state tax laws. If you have any questions or concerns about filing your taxes, don’t hesitate to consult with a tax professional or legal expert. Please call Brenden Kelley Law at 216-644-3359 so that we can assist you.

The Best Entity and Tax Structure for Your Dental Practice

by Brenden | Nov 20, 2022 | Business Law, Dental Practice

When starting a dental practice or restructuring an existing one, choosing the right entity and tax structure can be a crucial decision. However, there are many nuances and considerations that make it hard to pinpoint an all-encompassing answer. In this blog post, we will highlight some practical options for one or two-person dental practice entities.

Avoid Sole Proprietorship and General or Limited Partnerships

Sole proprietorships should be avoided since they do not offer personal liability protection for the dentist. All tax consequences and liabilities would be borne by the dentist, which is an unfavorable scenario. General and limited partnerships also lack limited liability protection, which makes them less desirable than other options.

Consider Limited Liability Companies and Corporations

For personal liability protection, it is best to form either a limited liability company (LLC) or a corporation. Both entities shield the owner(s) from the acts or omissions of the entity employees and other business operation liabilities. LLCs and corporations are both good choices when it comes to personal liability protection. However, they have different corporate formalities that must be followed. Corporations have more formalities, such as requirements to maintain minutes and have certain meetings, while LLCs do not have such obligations.

Understand the Tax Implications of Each Entity

When it comes to taxation, the entities have different requirements and implications. A partnership is a pass-through entity, which means all income, losses, and credits flow through to the partners’ individual income tax returns. However, partnerships must file a tax return even though the entity itself is not subject to tax. A C corporation is subject to double taxation, which means the corporation is taxed on all the business earnings, and those earnings are taxed again when paid out as dividends. An S corporation is subject to only one level of tax and can reduce the employment tax liability of the owners by managing their reasonable compensation in relation to the S corporation’s net-profit distributions.

For LLCs and corporations, the entities can be taxed as either a C corporation or an S corporation. However, if a dentist chooses a corporation as their entity, they must understand the corporation’s limitations in terms of tax flexibility from initial formation through to the sale of the dental practice.

Choose What Works Best for Your Dental Practice

There is no right or wrong answer when it comes to choosing the best entity and tax structure for a dental practice. Each option has its advantages and disadvantages, and the choice will depend on various factors, such as the number of dentists, business objectives, personal liability protection, tax implications, and more. Consulting with tax and legal professionals to help evaluate the options is a crucial step towards making an informed decision. Please call Brenden Kelley Law at 216-644-3359 so that we can assist you starting or restructuring your dental practice.

More on Dental Practices | Business Law | Contact Us