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The Smarter Startup
January 7, 2025

Key Q1 2025 Tax Deadlines for Startups

By addressing these Q1 tax deadlines proactively, your startup can remain compliant, optimize cash flow, and stay focused on growth in 2025.

The first quarter of 2025 is packed with critical tax deadlines for startups. Missing these dates can result in penalties, compliance issues, and lost opportunities for valuable tax credits. To help you stay on track, here’s a breakdown of the most important Q1 2025 tax deadlines, why they matter, and what steps your startup should take to prepare.

Also see our roundup of important 2025 tax deadlines for startups. It includes federal filing dates as well as key deadlines for San Francisco, New York, and Seattle throughout the year.

January 31: Year-End Reporting and Payroll Tax Credit Opportunities

  • R&D Tax Credit (Form 941): If your startup conducts research and development, you can offset payroll taxes using the R&D Tax Credit. Submitting Form 941 ensures you claim this benefit for Q4 of 2024.
    • Why It Matters: This credit provides significant cash flow relief, especially for early-stage startups not yet profitable.
    • Steps to Take: Work with your accountant or tax advisor to document eligible R&D expenses and file Form 941 on time.
  • 1099-NEC and W-2 Filings: Distribute W-2 forms to employees and 1099-NEC forms to independent contractors.
    • Why It Matters: Accurate and timely filings ensure compliance with IRS requirements and maintain good relationships with team members and contractors.
    • Steps to Take: Use payroll software or a third-party service to generate and file these forms.
  • 3921 and 3922 (Stock Options Reporting): Report stock option exercises and employee stock purchase plan activity.
    • Why It Matters: These forms help your employees accurately report income on their tax returns and keep your startup compliant with IRS regulations.
    • Steps to Take: Coordinate with your legal and HR teams to compile accurate stock option records.
  • Quarterly Sales and Use Tax Filing: Depending on your state, you may need to submit sales and use tax filings for Q4 of 2024.
    • Why It Matters: Avoid state penalties and maintain good standing for future business operations.
    • Steps to Take: Review your sales records and ensure all taxable transactions are accounted for.

February 28: Annual Reporting and ACA Compliance Deadlines

  • W-2 and 1099 Filings (Paper-Filing Deadline): For those still submitting paper forms, this is the last day to file W-2s and 1099s with the IRS. (Electronic filers have until March 31.)
    • Why It Matters: Late filings can result in penalties of up to $330 per form.
    • Steps to Take: Mail your paper forms to the IRS. If possible, consider switching to electronic filing for an additional month to prepare and to avoid mailing issues.
  • ACA Compliance Filings: Employers must file ACA-related forms (1094-B, 1095-B, 1094-C, and 1095-C) to report health coverage offered to employees.
    • Why It Matters: Non-compliance can trigger fines under the Affordable Care Act.
    • Steps to Take: Verify health coverage details with your benefits provider and file on time.

March 3: Delaware Annual Franchise Report

  • Delaware Corporations: Submit your Annual Franchise Report and pay the associated taxes.
    • Why It Matters: Non-filing can lead to significant fines and loss of good standing in Delaware, where many startups are incorporated.
    • Steps to Take: Log in to Delaware’s filing portal and calculate your tax based on shares authorized or an alternative method.

March 17: Federal and State Income Tax Deadlines for Partnerships and S-Corps

  • Income Tax Returns or Extensions: File your federal and state income tax returns or apply for an extension for S-Corporations and Partnerships.
    • Why It Matters: Paying late can result in penalties and interest. Extensions provide additional time but do not extend the payment due date.
    • Steps to Take: Gather your financial records, work with your accountant, and submit your return or extension.

Tax Preparation Tips for Startups

  1. Stay Organized: Use a calendar or tax software to track deadlines and receive reminders.
  2. Engage Professionals: Partner with a tax expert who specializes in startups to navigate complex filings and maximize benefits.
  3. Maintain Records: Keep detailed records of payroll, stock options, sales, and expenses to ensure accurate reporting.
  4. File Early: Whenever possible, file forms ahead of deadlines to avoid last-minute errors or system delays.