tax calendar

Tax Date Calendar for Small Businesses

April 15 may be in your rear view mirror, but your business still has tax-related obligations throughout the year. Don’t let these dates sneak up on you unexpectedly. Know what you need to file and when for the upcoming year:tax preparation

June 17, 2019: Q3 Estimated Quarterly Income Tax Payments Due

If your business pays estimated quarterly taxes, and these payments were prepared along with your Simma Flottemesch & Orenstein tax return, this is the deadline for your Quarter 2 payment.

September 16, 2019: Q3 Estimated Quarterly Income Tax Payments Due

Time to make your Quarter 3 payment.

September 16, 2019: S-Corp and Partnership Extension Deadline

Did you receive an extension for your S-Corp or partnership tax return? Then this is your deadline for submitting the return and payment.

October 15, 2019: Extension Deadline for Individuals, Sole Proprietors, LLCs and Corporations

This is the deadline for submitting your return and payment for any extended individual, sole proprietor, LLC or C-Corp tax returns.

December 31, 2019: 401(k) Deadline

Any contributions to you or your employee’s 401(k) but be completed by the end of the year if they’re to count toward your 2019 return.tax calendar

January 15, 2020: Q4 Estimated Quarterly Income Tax Payments Due

The taxes that were estimated for Quarter 4 are due in mid-January.

January 31, 2020: 1099 and W-2 Mailing Deadline

For your traditional employees, you must get their W-2 forms in the mail by the end of January. Any 1099s for contractors you worked with during 2019 must be postmarked by January 31 as well.

March 16, 2020: S-Corp and Partnership Tax Return Deadline

S-Corps and partnerships must file their 2019 tax return and submit payment by March 16, a month before the individual return deadline.

April 15, 2020:

  • Tax filing deadline for individual, sole proprietor, LLC and C-Corp returns
  • Q1 estimated quarterly income tax payments due
  • Simple Employee Pension (SEP) contribution deadline
  • IRA contribution deadline, for both traditional and Roth IRA accounts

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records

Retaining Your Tax Documents

Whether the results of this most recent tax season had a positive or negative impact on your bank account, it’s important to consider how long you should retain your tax documents. This includes a copy of your tax return and any documents providing support of income or deduction items, as well as evidence for any credits received.  A period of limitations is determined by the IRS based on the time in which you could amend a return to claim a credit or refund, or during which the IRS can assess additional tax.

The general rule of thumb is three years. This means you should retain a copy of your return and supporting documents for that return until three years from the filing due date. For example, you should keep the information regarding the return that was due April 15, 2019 until April 15, 2022, at the very least. Keep in mind, these periods are federal guidelines. States may have their own statute of limitations.tax records

Exceptions

There are a lot of “buts” in tax circumstances. Fittingly, if you claim a bad debt deduction or a loss from worthless securities, retain your records for seven years instead of three. If you have ever filed a fraudulent return, or forgotten to file a tax return, the IRS requires you keep your financial records for your lifetime.  Finally, if for some reason, 25 percent of your income was not reported on your tax return, the IRS has up to six years to impose additional tax.

Period of limitations

The IRS has provided the following information on a period of limitations for different scenarios:

  1. Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.
  2. Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
  3. Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
  4. Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
  5. Keep records indefinitely if you do not file a return.
  6. Keep records indefinitely if you file a fraudulent return.
  7. Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.shred

Disposal

A good scanner has made the electronic retention of these records fairly efficient. However, when disposing of your records and prior tax returns, it’s important to shred any physical documents that may bare identifiable information. Poorly disposed of documents could make you susceptible to identity theft. For electronic information, be sure to have strong security software in place. Keep in mind, that although the IRS may no longer have a use for your records, they could be needed by your insurance company or creditors, in some cases.

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gift

Understanding Gift Tax

Feeling generous? A gift is a transfer of money or property to another person, without receiving full monetary consideration in return. The federal gift tax’s purpose is to prevent individuals from avoiding estate tax by giving away that money prior to death. This tax is often misunderstood because of its interconnections with the estate tax.

Your yearly and lifetime gift totals would have to be rather lofty to incur taxes. You can gift up to $15,000 in 2019 without filling out the gift tax form. The annual exclusion applies to each recipient. Therefore, you could gift up to $15,000 to multiple individuals, and the annual exclusion will apply to each gift. There’s also a lifetime gift exclusion—which rises to $11.4 million in 2019.gift

Excluded gifts

There are certain gifts that are not taxable. These include tuition or medical expenses you pay for someone (paid directly to a qualified education or medical institution), gifts to your spouse, gifts to a political organization for its use or gifts to qualifying charities (considered charitable donations). These are the only form of gifts that are deductible on your return.

Gifting specifics

If you and your spouse wish to gift joint assets, like property, your annual exclusion rates are combined and applied to the gift. Meaning, in 2019, you could gift, together, money or property valuing up to $30,000. The lifetime exclusion amount doubles for married couples as well. Special rules also allow givers to spread a large, one-time gift across five years’ worth of tax returns (thus preserving their lifetime gift exclusion). Keep in mind that interest-free loans to friends and family are considered gifts in the eyes of the IRS.gift

The paperwork

Above the annual amount of $15,000, you must file IRS Form 709 to disclose a gift. This form will report the fair market value of the gift, the date of transfer, the donor’s tax basis and the identity of the recipient. If any taxes are incurred on the gift, it is the donor who is responsible for them.* The gift tax rate ranges from 18-40 percent. As with most aspects of your taxes, the IRS favors transparency of transactions and evidence. This means, in addition to Form 709, be prepared to provide copies of appraisals for the gift and any documents related to the gift’s transfer.

*some special arrangements allow the recipient to pay the gift tax instead

Lifetime exclusion

Over your lifetime, the IRS keeps a running total of your taxable gifts each year. The IRS does not want individuals to avoid estate taxes on their assets after death by gifting away these assets during their lifetime. From year to year, if you exceed the annual exclusion amount, the excess spills over into the lifetime exclusion category, whittling away at its total. At your time of death, your estate will be exempt from taxation in the amount of your remaining total lifetime gift tax exemption. Thus, amounts in excess of the annual exclusion each year count against both your lifetime gift tax exemption and your federal estate tax exemption.

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