This week’s tax question:
How am I supposed to keep track of all these tax deadlines? What’s due when?
We passed the question on to Betty Kayton, who assists startup firms and entrepreneurs with financial, human resources and tax matters until these firms are ready to hire a full-time chief financial officer. She submitted this answer to VentureBeat:
The requirements vary by jurisdiction. The information in this article was prepared for a startup corporation located in San Francisco. Depending upon where you are located (and if you are a corporation or a limited liability company), some of these items may or may not apply to you. And you may be subject to other local rules, such as city and county business licenses, which aren’t listed below.
Before last payroll is run for the year
- 401(k) top heavy testing.
- Be sure all payroll-related payments are included on W-2.
- Make all payments to 401(k), FSA, HSA. Include the following on W-2: group term life insurance > $50K, HSA payments (employer and employee), taxable benefits (if any).
- If an employee exercised NSO stock options during the year, then you need to include the “paper profit” on the options as part of their W-2 taxable wages.
- After you make sure everything is correct, then prepare W-2 forms and give then to employees. Usually, your payroll service will do this for you.
- Prepare and mail 1099 forms to service providers and recipients of interest income, rent and royalties.
- Prepare and mail forms 3921 and 3922 to persons who purchased stock by exercise of incentive stock options and/or purchase of stock through ESPP.
- Prepare and pay California sales and use tax.
- Mail 1099, 3921 and 3922 forms to the IRS with form 1096 cover sheet(s). (See VentureBeat’s complete coverage of
- Delaware franchise tax due.
- San Francisco business license due.
- California QSBS election due on form 3565 (for stock sold by the company during the year)
- California franchise tax return due, but you can get automatic extension of time to file
- Federal income tax return due, but you can get extension by filing form 7004
- If you have foreign activities and/or bank accounts, then you probably need to file forms 5471, 5472 and/or TD F 90-22.1. The fine for not filing is $10K, so don’t miss it
- Remind employees that if they did 83(b) elections (for purchase of unvested stock), they need to include a copy of the 83(b) election when they submit their personal income tax on form 1040
- $800 minimum franchise tax due to state of California (except the first year, when no payment is required)
California “annual statement of information” is due prior to your annual anniversary of incorporation (or qualification to do business in California).
After the deadline
You’ll note that some of these deadlines have already passed. What should you do? As I noted in my discussion of form 1099, do your best to catch up — but watch out for filing requirements that carry heavy fines if missed, like the foreign-activities forms.
As with anything related to the government, the rules are constantly changing. And local laws only apply within a particular state or city, so you may have a different set of rules that apply to you.
Disclaimer: This “Ask the accountant” article discusses general legal, tax and financial issues, but it does not constitute legal, tax or financial advice in any respect. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of appropriate professionals in the relevant jurisdiction. VentureBeat, the author and the author’s firm expressly disclaim all liability in respect of any actions taken or not taken based on any contents of this post.
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