Latest Tax News


Second Quarter 2014 Due Dates

POSTED 04/04/14

Tuesday, April 15th:

Individuals:

2013 Form 1040 due, or file Form 4868 for a 6-month automatic extension.

Last day to contribute to an IRA and ESA for 2013.

First installment of 2014 estimated tax due.

2013 Form 709, US Gift Tax Return, due if more than $14,000 was gifted to any individual besides a spouse or charity in 2013, or file Form 4868 or 8892 for a 6-month automatic extension.

Partnerships:

2013 Form 1065 due, or file Form 7004 for automatic 5-month extension.

Calendar-Year-End C Corporations:

First installment of 2014 estimated tax due.

Wednesday, April 30th:

Employers:

File Form 941 for 1st quarter 2014.

Thursday, May 15th:

Partnerships & S Corporations:

File Form 8752 if on fiscal year under Section 444 election.

Monday, June 16th:

Individuals:

2nd installment of 2014 estimated tax due.

2013 Form 1040 due for U.S. citizens or resident aliens living/working (or active duty military) outside the U.S. or Puerto Rico or file Form 4868 for 6-month automatic extension.

Calendar-Year-End C Corporations:

Second installment of 2014 estimated tax due.

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Tax Season Has Begun!

POSTED 02/21/14

BUSINESS RETURNS: The IRS began accepting electronically filed and paper filed 2013 business returns on Monday, January 13th. This includes Forms 1120, 1120S, 1065 and 1041.

INDIVIDUAL RETURNS: The IRS began accepting electronically filed and paper filed 2013 Individual Returns, Form 1040 series, on January 31, 2014.

WHY THE DELAY: The IRS announced a delay of approximately one to two weeks to the start of the 2014 filing season to allow adequate time to program and test tax processing systems following the 16-day federal government closure.

E-FILE OR PAPER FILE?: The IRS encourages taxpayers to electronically file stating “There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.”

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2014 Standard Mileage Rates

POSTED 01/18/14

Beginning January 1st, 2014, the standard mileage rates for the use of a car will be:

 56 cents per mile for business miles

 23.5 cents per mile driven for medical/ moving

 14 cents per mile charitable service

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1st Quarter 2014 Due Dates

POSTED 01/18/14

January 15:

Individuals: Fourth quarter 2013 estimated tax payments due (final Installment).

January 31:

Employers: Give your employees their copies of Form W-2 for 2013. File Form 941 for 4th quarter 2013, or annual Form 944. File Form 940 for 2013.

Businesses: Distribute Form 1099 to recipients for 2013.

February 17:

Employees: Submit a new Form W-4 to your employer.

February 28:

Employers: File Form W-3 with Copy A of all Forms W-2, and Form 1096 with Copy A of all Forms 1099. Large food or beverage establishments file Form 8027 to report 2013 tip income, reported tips, and allocated tips.

March 17:

Calendar-Year Corporations: 2013 income tax return (Forms 1120 and 1120S) due, or file Form 7004 for an automatic six-month extension. Provide shareholders with copy of Schedule K-1 (Form 1120S.)

C Corporations & LLCs: File Form 2553 to choose to be treated as an S corporation beginning on January 1, 2014.

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4th Quarter 2013 Due Dates

POSTED 10/06/13

October 1:

Businesses: Deadline for establishing a new SIMPLE retirement plan

Employers: Deliver to employees Notice of Availability of State Health Care Exchanges

October 15:

Individuals: 2012 Form 1040 due if on extension

October 31:

Employers: File Form 941 for 3rd quarter 2013

During November:

Employers: Request Form W-4s from employees whose withholding allowances will be different in 2014

December 17:

Calendar-year C Corporations: 4th installment of 2013 estimated tax due

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3rd Quarter 2013 Due Dates

POSTED 07/08/13

July 31:

◊ Employers. File Form 941 for 2nd quarter 2013.

◊ Employers. Form 5500 or 5500-EZ for calendar year 2012 due if you maintain an employee benefit plan, or file Form 5558 to request an extension.

September 16:

◊ Individuals. 3rd installment of 2013 estimated tax due.

◊ Calendar-year C Corporations. 3rd installment of 2013 estimated tax due.

◊ Corporations. 2012 returns due for calendar- year C & S Corporations (Form 1120 & 1120S) if on extension.

◊ Partnerships. Calendar year 2012 return due (Form 1065) if on extension.

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2nd Quarter 2013 Due Dates

POSTED 03/24/13

Monday, April 15th:

Individuals: 2012 Form 1040 due, or file Form 4868 for a 6-month extension. Last day to contribute to an IRA and ESA for 2012. First installment of 2013 estimated tax due. 2012 Form 709, US Gift Tax Return, due if more than $13,000 was gifted to any individual besides a spouse or charity in 2012.

Partnerships: 2012 Form 1065 due, or file Form 7004 for automatic 5-month extension.

Calendar-Year-End C Corporations: First installment of 2013 estimated tax due.

Tuesday, April 30th:

Employers: File Form 941 for 1st quarter 2013.

Wednesday, May 15th:

Partnerships & S Corp: Form 8752 due if on a fiscal year under Section 444 election.

Monday, June 17th:

Individuals: 2nd installment 2013 estimated tax due for individuals. 2012 Form 1040 due for U.S. citizens or resident aliens living/working (or active duty military) outside the U.S. or Puerto Rico or file Form 4868 for 6-month extension.

Calendar-Year-End C Corporations: Second installment of 2013 estimated tax due.

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1st Quarter 2013 Due Dates

POSTED 01/26/13

January 15:

Individuals: Fourth quarter 2012 estimated tax payments due (final Installment).

January 31:

Employers: Give your employees their copies of Form W-2 for 2012. File Form 941 for 4th quarter 2012, or annual Form 944. File Form 940 for 2012.

Businesses: Distribute Form 1099 to recipients for 2012.

February 15:

Employees: Submit a new Form W-4 to your employer.

February 28:

Employers: File Form W-3 with Copy A of all Forms W-2, and Form 1096 with Copy A of all Forms 1099. Large food or beverage establishments file Form 8027 to report 2012 tip income, reported tips, and allocated tips.

March 15:

Calendar-Year Corporations: 2012 income tax return (Forms 1120 and 1120S) due, or file Form 7004 for an automatic six-month extension. Provide shareholders with copy of Schedule K-1 (Form 1120S.)

C Corporations & LLCs: File Form 2553 to choose to be treated as an S corporation beginning on January 1, 2013.

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4th Quarter 2012 Due Dates

POSTED 10/01/12

October 1:

Businesses: Deadline for establishing a new SIMPLE retirement plan

October 15

Individuals: 2011 Form 1040 due if on extension

October 31:

Employers: File Form 941 for 3rd quarter 2012

During November:

Employers: Request Form W-4s from employees whose withholding allowances will be different in 2013.

December 17:

Calendar – year C Corporations : 4th installment of 2012 estimated tax due

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3rd Quarter 2012 Due Dates

POSTED 7/5/12

July 31:

Employers. File Form 941 for 2nd quarter 2012.

Employers. Form 5500 or 5500-EZ for calendar year 2011 due if you maintain an employee benefit plan, or file Form 5558 to request an extension.

September 17:

Individuals. 3rd installment of 2012 estimated tax due.

Calendar-year C Corporations. 3rd installment of 2012 estimated tax due.

Corporations. 2011 returns due for calendar- year C & S Corporations (Form 1120 & 1120S) if on extension.

Partnerships. Calendar year 2011 return due (Form 1065) if on extension.

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Payroll Tax Cut Temporarily Extended into 2012

POSTED 2/20/12

The Temporary Payroll tax cut Continuation Act of 2011 temporarily extends the two % payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 % to 4.2 % of wages paid through February 29, 2012. This reduced Social Security withholding will have no effect on employees’ future Social Security benefits. Employers should implement the new payroll tax rate as soon as possible in 2012 but not later than January 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2012.

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4th Quarter 2011 Due Dates

Posted 9/22/11

Image Detail

October 1:

  • Businesses: Deadline for estab-lishing a new SIMPLE retirement plan

October 17:

  • Individuals: 2010 Form 1040 due if on extension

November 1:

  • Employers: File Form 941 for 3rd quarter 2011

During November:

  • Employers: Request Form W-4s from employees whose withholding allowances will be different in 2012

  • Employers: Request Form W-5 from each eligible employee who wants to receive advance payments of the Earned Income Credit during 2012

December 15:

  • Calendar-year C Corporations: 4th installment of 2011 estimated tax due

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Reminder: Tax Filing Deadlines

Posted 9/22/11

Calendar-Year Corporate returns and Partnership returns (Federal Forms 1120, 1120S, and 1065) are due September 15th! This is the final deadline to file returns for both corporations and partnerships, as no additional extensions are available. Late returns will be subject to the following penalties:

C-Corp (Form 1120) – Minimum penalty for late filing if a return is more than 60 days late is lesser of $135 or 100% of the amount of tax required to be shown on the return. If tax is due, the late filing pen-alty assessed is 5% of the unpaid balance per month or part of a month with a maximum of 25% plus interest. However, the above penalties will not be imposed if the corporation can show the failure was due to reasonable cause and not willful neglect.

S-Corp (Form 1120S) – The penalty for failure to file a return is $195 per month per shareholder up to 12 months and is assessed against the corporation. In addition, if tax is due, a late filing penalty may be imposed similar to the C-Corp, 5% of tax owner per month up to 25%, as well as the minimum penalty of the lesser of $135 or amount of unpaid tax if the return is more than 60 days late. As with C-Corps, the penalties for failure to file an 1120S will not be imposed if reasonable cause is established.

Partnership (Form 1065) – The penalty for failure to file is $195 per month per partner up to 12 months and is assessed against the partnership. The penalty will be abated if the partnership can show reasonable cause, but please note it is much more difficult for a partnership to qualify for the reasonable cause exception.

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Mileage Rate Increase

POSTED 8/4/11

In recognition of recent gasoline price increases, the IRS made this special mileage rate adjustment for the final months of 2011. The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage. The new six-month rate for computing deductible medical or moving expenses will also increase. See the cents per mile rate chart below.

                           Rates 1/1 through 6/30/11                 Rates 7/1 through 12/31/11

Business                                51                                                          55.5

Medical/Moving                 19                                                          23.5

Charitable                            14                                                          14

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3rd Quarter 2011 Due Dates

POSTED 8/4/11

August 1:

  • Employers. File Form 941 for 2nd quarter 2011.

  • Employers. Form 5500 or 5500-EZ for calendar year 2010 due if you maintain an employee benefit plan, or file Form 5558 to request an extension.

September 15:

  • Individuals. 3rd installment of 2011 estimated tax due.

  • Calendar-year C Corpora-tions. 3rd installment of 2011 estimated tax due.

  • Corporations. 2010 returns due for calendar- year C & S Corporations (Form 1120 & 1120S) if on extension.

  • Partnerships. Calendar year 2010 return due (Form 1065) if on extension.

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Repeal of 1099 Reporting

POSTED 5/2/11

President Obama signed into law on April 14th a bill to repeal expanded Form 1099 information reporting requirements for certain business payments and rental property expense payments. It repeals the following:

1. The requirement to report payments to companies for merchandise purchased in the aggregate of $600 or more (originally effective for 2012),

2. The requirement for rental property owners to report expense payments in the aggregate of $600 or more (originally effective for 2011), and

3. The requirement to report payments for services and merchandise to corporations (other than attorneys and certain health care providers) in the aggregate of $600 or more (originally effective for 2012).

The repeals under the new law are retroactive, thus reinstating the status quo for Form 1099 reporting as established prior to enactment of the 2010 Patient Protection and Affordable Care Act and the 2010 Small Business Jobs Act. In general, only businesses must report payments to service providers in the aggregate of $600 or more, and the current exception for not reporting payments made to corporations (except attorneys and certain healthcare providers) remains intact. Furthermore, rental property owners must report payments to service providers if their activities rise to the level of a trade or business.

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2nd Quarter 2011 Due Dates

POSTED 3/28/11

Monday, April 18:

  • Individuals: 2010 Form 1040 due, or file Form 4868 for an automatic 6-month extension. Last day to contribute to an IRA and ESA for 2010. First installment of 2011 estimated tax due. 2010 Form 709, US Gift Tax Return, due if more than $13,000 was gifted to any individual other than a spouse or charity in 2010.

  • Partnerships: 2010 Form 1065 due, or file Form 7004 for automatic 5-month extension.

  • Calendar-Year-End C Corporations: First installment of 2011 estimated tax due.

Monday, May 2nd:

  • Employers: File Form 941 for 1st quarter 2011.

Tuesday, May 17:

  • Partnerships & S Corporations: Form 8752 due for those using a fiscal year under a Section 444 election.

Wednesday, June 15:

  • Individuals: Second installment of 2011 estimated tax due for individuals. 2010 Form 1040 due for U.S. citizens or resident aliens living and working (or on active military duty) outside the U.S. and Puerto Rico, or file Form 4868 for 6-month extension.

  • Calendar-Year-End C Corporations: Second installment of 2011 estimated tax due.

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Taxable or Non-Taxable Income?

POSTED 3/1/11

There are situations when certain types of income are only partially taxed or not taxed at all. Some examples of non-taxable Income are:

1. Adoption expense reimbursements for qualifying expenses,

2. Child support payments,

3. Gifts, bequests and inheritances,

4. Non cash employer gifts (holiday turkey),

5. Workers’ compensation benefits,

6. Meals and lodging for the convenience of your employer,

7. Compensatory damages awarded for physical injury or physical sickness,

8. Welfare benefits,

9. Economic recovery payments, and

10. Cash rebates from a dealer or manufacturer

Some income may be taxable under certain circumstances, but not taxable in other situations. Examples of items that may or may not be included in your taxable income are:

1. Life Insurance If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. Life insurance proceeds which were paid to you because of the insured person’s death are not taxable unless the policy was turned over to you for a price.

2. Scholarship or Fellowship Grant If you are a candidate for a degree, you can exclude amounts you receive as a qualified scholarship or fellowship. Amounts used for room and board do not qualify.

3. Non-cash Income Taxable income may be in a form other than cash. One example of this is bartering, which is an exchange of property or services. The fair market value of goods and services exchanged is fully taxable and must be included as income on Form 1040 of both parties.

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Nondeductible Expenses

POSTED 3/1/11

As a small business owner, you have the opportunity to deduct certain expenses from your taxes. Don’t let yourself get carried away though; there are some expenses that are not deductible, regardless of the situation. Just as a reminder, below are some common expenses that CANNOT be deducted as a business expense.

Clothing—Unless it is protective gear, or a uniform not to be worn during non-working hours, clothing cannot be deducted.

Commuting Expenses—The cost of transpor-tation from your home to your main/regular place of work.

Life Insurance Premiums—If the business or the business owner is a direct or indirect beneficiary, the expense cannot be deducted.

Lunches with Co-workers—Meals with co-workers are nondeductible, unless traveling away from home on business.

Personal Legal Expenses—For example, legal fees relating to custody of children, divorce, preparation of a will, and personal injury claims are nondeductible.

Political Contributions—Political donations and lobbying expenses to influence voters are not deductible.

Residential Telephone Service—The first telephone line to your residence is nondeduct-ible even if used in a trade or business.

Health Club, Social Club or Country Club Dues—In general, club fees and weight loss programs are nondeductible, even if your job requires to you stay in shape. (Note: If certain conditions are met, the expense may qualify as a medical expense.)

Fines and Penalties—Traffic tickets, tax penalty payments, and violations of law are not deductible expenses.

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1st Quarter 2011 Due Dates

POSTED 12/21/10

January 17:

  • Individuals: Fourth quarter 2010 estimated tax payments due (final Installment).

January 31:

  • Employers: Give your employees their copies of Form W-2 for 2010. File Form 941 for 4th quarter 2010, or annual Form 944. File Form 940 for 2010.

  • Businesses: Distribute Form 1099 to recipients for 2010.

February 15:

  • Employees: Submit a new Form W-4 to your employer to continue exemption claimed last year.

February 28:

  • Employers: File Form W-3 with Copy A of all Forms W-2, and Form 1096 with Copy A of all Forms 1099. Large food or bever-age establishments file Form 8027 to report 2010 tip income, reported tips, and allocated tips.

March 15:

  • Calendar-Year Corporations: 2010 income tax return (Forms 1120 and 1120S) due, or file Form 7004 for an automatic six-month extension. Provide shareholders with copy of Schedule K-1 (Form 1120S.)

  • C Corporations & LLCs: File Form 2553 to choose to be treated as an S corporation beginning on January 1, 2011.

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Year-End Moves for Business Owners

POSTED 11/29/10

If you hire a worker who has been unemployed for at least 60 days, your business will be exempt from their 6.2% share of the Social Security payroll tax on the new-hire for the remainder of 2010. Plus, if you keep that new-hire on the payroll for a continuous 52 weeks, your business could be eligible for a nonrefund-able tax credit of up-to $1,000 for 2011.

To qualify for the 50% bonus first-year de-preciation allowance, put new business equipment and machinery in service before year-end. If Congress does not take action, this bonus won’t be available for property placed in service after 2010.

 The maximum amount you can expense for a tax year beginning in 2010 is $500,000 of the cost of qualifying property placed in service for that tax year. Also, within the overall $500,000 expensing limit, you can expense up to $250,000 of qualified real property. Note that at tax return time, you can choose not to use expensing (or bonus depreciation) for 2010 assets.

 Set up a self-employed retirement plan if you are self employed and haven’t done so yet.

Consider establishing a retirement plan for your business. Employer contributions to qualified plans are deductible.

Increase your basis in a partnership or S corporation if doing so will enable you to deduct a loss from it for this year.

Consider whether to defer cancellation of debt income from the reacquisition of an applicable debt instrument in 2010. The business can elect to recognize the income ratably over five tax years beginning with the fourth tax year following the tax year in which the repurchase occurs (i.e., begin-ning with 2014).

Consider using a credit card to prepay expenses that can generate deductions for this year.

Accrual method businesses should consider accruing year-end bonuses to employees who are not controlling shareholders. They are deductible in the current year even though paid in the following year, and the bonus won’t be taxable to the employee until next year.

 (See the Special Year-End 2010 Small Biz Builder for information on moves for Individuals)

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Get Copies of Your Tax Documents Faster

POSTED 11/29/10 

Previously filed copies of your tax return can be aquiered faster and easier.  All an individual needs to do is call the new toll-free number (1-800-908-9946) and follow the message prompts, or complete IRS Form 4506T, Request for Transcript of Tax Return, and mail it to the address listed in the instructions.  You should receive your transcript in fewer than two weeks.  For mailed requests, allow up to 30 days.

 (See the December 2010 Small Biz Builder for more information)

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Small Business Jobs Act of 2010

POSTED 11/10/10

The recently enacted 2010 Small Business Jobs Act (the Act) provides for $12 billion in tax breaks and incentives, and implements various revenue raisers to fund the bill.  Despite the name “small business,” the act includes retirement saving incentives for individuals.  Since only a few provisions are permanent and many have a very short lifespan, this Act is crucial to your year-end tax planning.  Here’s a brief overview of the new law (See the November 2010 Small Biz Builder).  Call us to discuss how the Act affects your business.

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 4th Quarter Due Dates

POSTED 10/08/10

 October 1:     Businesses: Deadline for establishing a new SIMPLE retirement plan

 October 15:        Individuals: 2009 Form 1040 due if on extension

November 1:     Employers: File Form 941 for 3rd quarter 2010

During November:

                           Employers: Request new Form W -4s from employees whose withholding allowances will be different in 2011

                           Employers: Request Form W-5 from each eligible employee who wants to receive advance payments of the Earned Income Credit during 2011

 December 15:   Calender-year C Corportations: 4th installment of 2010 estimated tax due

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SIMPLE Plan Deadline Approaches

POSTED 09/15/10

A Savings Incentive Match Plan for Employees (SIMPLE plan) is a written arrangement that provides your small business and its employees with a simplified way to make contributions to retirement. Under a SIMPLE plan, employees can choose to defer as much as $11,500 (for 2010) to the plan rather than receiving these amounts as a part of their regular pay, and there generally is a mandatory employer contribution as well. Plan assets grow tax deferred until withdrawal and participants have complete direction over their own retirement as-sets held in their account.

New SIMPLE plans must be set up prior to Oct. 1. This requirement does not apply if you are a new employer that comes into existence after October 1 of the year the plan is set up and you set up a SIMPLE plan as soon as administratively feasible after you come into existence.

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