July 2019 Business Due Dates

July 1 – Self-Employed Individuals with Pension Plans

If you have a pension or profit-sharing plan, you may need to file a Form 5500 or 5500-EZ for the calendar year 2018. Even though the forms do not need to be filed until July 31, you should contact this office now to see if you have a filing requirement, and if you do, allow time to prepare the return.

July 15 – Non-Payroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in June.

July 15 – Social Security, Medicare and Withheld Income Tax

If the monthly deposit rule applies, deposit the tax for payments in June.

July 31 –  Self-Employed Individuals with Pension Plans 

If you have a pension or profit-sharing plan, this is the final due date for filing Form 5500 or 5500-EZ for calendar year 2018.

July 31 – Social Security, Medicare and Withheld Income Tax

File Form 941 for the second quarter of 2019. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until August 12 to file the return.

July 31 – Certain Small Employers

Deposit any undeposited tax if your tax liability is $2,500 or more for 2019 but less than $2,500 for the second quarter.

July 31 – Federal Unemployment Tax

Deposit the tax owed through June if more than $500.

July 31 – All Employers

If you maintain an employee benefit plan, such as a pension, profit-sharing, or stock bonus plan, file Form 5500 or 5500-EZ for calendar year 2018. If you use a fiscal year as your plan year, file the form by the last day of the seventh month after the plan year ends.

July 2019 Individual Due Dates

July 1 – Time for a Mid-Year Tax Check UpTime to review your 2019 year-to-date income and expenses to ensure estimated tax payments and withholding are adequate to avoid underpayment penalties.

July 10 – Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during June, you are required to report them to your employer on IRS Form 4070 no later than July 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

June 2019 Business Due Dates

June 17 – Employer’s Monthly Deposit Due

If you are an employer and the monthly deposit rules apply, June 17 is the due date for you to make your deposit of Social Security, Medicare and withheld income tax for May 2019. This is also the due date for the non-payroll withholding deposit for May 2019 if the monthly deposit rule applies.

June 17 – Corporations

Deposit the second installment of estimated income tax for 2019 for calendar year corporations.

June 2019 Individual Due Dates

June 10 – Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during May, you are required to report them to your employer on IRS Form 4070 no later than June 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

June 17 – Estimated Tax Payment Due

It’s time to make your second quarter estimated tax installment payment for the 2019 tax year. Our tax system is a “pay-as-you-earn” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-earn” requirement. These include:

  • Payroll withholding for employees;
  • Pension withholding for retirees; and
  • Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding.

When a taxpayer fails to prepay a safe harbor (minimum) amount, they can be subject to the underpayment penalty. This penalty is equal to the federal short-term rate plus 3 percentage points, and the penalty is computed on a quarter-by-quarter basis.

Federal tax law does provide ways to avoid the underpayment penalty. If the underpayment is less than $1,000 (the “de minimis amount”), no penalty is assessed. In addition, the law provides “safe harbor” prepayments. There are two safe harbors:

  • The first safe harbor is based on the tax owed in the current year. If your payments equal or exceed 90% of what is owed in the current year, you can escape a penalty.
  • The second safe harbor is based on the tax owed in the immediately preceding tax year. This safe harbor is generally 100% of the prior year’s tax liability. However, for taxpayers whose AGI exceeds $150,000 ($75,000 for married taxpayers filing separately), the prior year’s safe harbor is 110%.

Example: Suppose your tax for the year is $10,000 and your prepayments total $5,600. The result is that you owe an additional $4,400 on your tax return. To find out if you owe a penalty, see if you meet the first safe harbor exception. Since 90% of $10,000 is $9,000, your prepayments fell short of the mark. You can’t avoid the penalty under this exception.

However, in the above example, the safe harbor may still apply. Assume your prior year’s tax was $5,000. Since you prepaid $5,600, which is greater than 110% of the prior year’s tax (110% = $5,500), you qualify for this safe harbor and can escape the penalty.

This example underscores the importance of making sure your prepayments are adequate, especially if you have a large increase in income. This is common when there is a large gain from the sale of stocks, sale of property, when large bonuses are paid, when a taxpayer retires, etc. Timely payment of each required estimated tax installment is also a requirement to meet the safe harbor exception to the penalty. If you have questions regarding your safe harbor estimates, please call this office as soon as possible.

CAUTION: Some state de minimis amounts and safe harbor estimate rules are different than those for the Federal estimates. Please call this office for particular state safe harbor rules.

June 17 – Taxpayers Living Abroad

If you are a U.S. citizen or resident alien living and working (or on military duty) outside the United States and Puerto Rico, June 17 is the filing due date for your 2018 income tax return and to pay any tax due. If your return has not been completed and you need additional time to file your return, file Form 4868 to obtain 4 additional months to file. Then, file Form 1040 by October 15. However, if you are a participant in a combat zone, you may be able to further extend the filing deadline (see below).

Caution: This is not an extension of time to pay your tax liability, only an extension to file the return. If you expect to owe, estimate how much and include your payment with the extension. If you owe taxes when you do file your extended tax return, you will be liable for both the late payment penalty and interest from the due date.

Combat Zone – For military taxpayers in a combat zone/qualified hazardous duty area, the deadlines for taking actions with the IRS are extended. This also applies to service members involved in contingency operations, such as Operation Iraqi Freedom or Enduring Freedom. The extension is for 180 consecutive days after the later of:

  • The last day a military taxpayer was in a combat zone/qualified hazardous duty area or served in a qualifying contingency operation, or have qualifying service outside of the combat zone/qualified hazardous duty area (or the last day the area qualifies as a combat zone or qualified hazardous duty area), or
  • The last day of any continuous qualified hospitalization for injury from service in the combat zone/qualified hazardous duty area or contingency operation, or while performing qualifying service outside of the combat zone/qualified hazardous duty area.

In addition to the 180 days, the deadline is also extended by the number of days that were left for the individual to take an action with the IRS when they entered a combat zone/qualified hazardous duty area or began serving in a contingency operation.

It is not a good idea to delay filing your return because you owe taxes. The late filing penalty is 5% per month (maximum 25%) and can be a substantial penalty. It is generally better practice to file the return without payment and avoid the late filing penalty. We can also establish an installment agreement, which allows you to pay your taxes over a period of up to 72 months.

Please contact this office for assistance with an extension request or an installment agreement.

May 2019 Business Due Dates

May 10 – Social Security, Medicare and Withheld Income Tax

File Form 941 for the first quarter of 2019. This due date applies only if you deposited the tax for the quarter in full and on time.

May 15 – Employer’s Monthly Deposit Due

If you are an employer and the monthly deposit rules apply, May 15 is the due date for you to make your deposit of Social Security, Medicare and withheld income tax for April 2019. This is also the due date for the non-payroll withholding deposit for April 2019 if the monthly deposit rule applies.

May 2019 Individual Due Dates

May 10 – Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during April, you are required to report them to your employer on IRS Form 4070 no later than May 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

May 31 –  Final Due Date for IRA Trustees to Issue Form 5498

Final due date for IRA trustees to issue Form 5498, providing IRA owners with the fair market value (FMV) of their IRA accounts as of December 31, 2018. The FMV of an IRA on the last day of the prior year (Dec 31, 2018) is used to determine the required minimum distribution (RMD) that must be taken from the IRA if you are age 70½ or older during 2019. If you are age 70½ or older during 2019 and need assistance determining your RMD for the year, please give this office a call. Otherwise, no other action is required and the Form 5498 can be filed away with your other tax documents for the year.

April 2019 Business Due Dates

April 1 – Electronic Filing of Forms 1098, 1099 and W-2G

If you file Forms 1098, 1099 (other than 1099-MISC withan amount in box 7), or W-2G electronically with the IRS, this is the final due date. This due date applies only if you file electronically (not paper forms). Otherwise, January 31 or February 28 was the due date, depending on the form filed. The due date for giving the recipient these forms was January 31.

April 1 -Applicable Large Employers (ALE) – Form 1095-C

If filing electronically, file Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, with the IRS. If filing on paper the due date was February 28, 2019.

April 1 – Large Food and Beverage Establishment Employers

If you file Forms 8027 for 2018 electronically with the IRS, this is the final due date. This due date applies only if you file electronically. Otherwise, February 28 was the due date.

April 15 – Household Employer Return Due

If you paid cash wages of $2,100 or more in 2018 to a household employee, you must file Schedule H. If you are required to file a federal income tax return (Form 1040), file Schedule H with the return and report any household employment taxes. Report any federal unemployment (FUTA) tax on Schedule H if you paid total cash wages of $1,000 or more in any calendar quarter of 2017 or 2018 to household employees. Also, report any income tax that was withheld for your household employees. For more information, please call this office.

April 15 – C-Corporations

File a 2018 calendar year income tax return (Form 1120) and pay any tax due. If you need an automatic 6 -month extension of time to file the return, file Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information and Other Returns, and deposit what you estimate you owe. Filing this extension protects you from late filing penalties but not late payment penalties, so it is important that you estimate your liability and deposit it using the instructions on Form 7004.

April 15 – Social Security, Medicare and Withheld Income Tax

If the monthly deposit rule applies, deposit the tax for payments in March.

April 15 – Non-Payroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in March.

April 15 – C-Corporations

The first installment of 2019 estimated tax of a calendar year corporation is due.

April 15 – Fiduciary Returns

Last day to file a 2018 calendar year fiduciary return (Form 1041, U.S. Income Tax Return of Estates and Trusts) or file an extension.

April 30 – Social Security, Medicare and Withheld Income Tax

File Form 941 for the first quarter of 2019. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until May 10 to file the return.

April 30 – Federal Unemployment Tax

Deposit the tax owed through March if it is more than $500

April 2019 Individual Due Dates

April 1 – Last Day to Withdraw Required Minimum Distribution

Last day to withdraw 2018’s required minimum distribution from Traditional or SEP IRAs for taxpayers who turned 70½ in 2018. Failing to make a timely withdrawal may result in a penalty equal to 50% of the amount that should have been withdrawn. Taxpayers who became 70½ before 2018 were required to make their 2018 IRA withdrawal by December 31, 2018.

April 10 –  Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during March, you are required to report them to your employer on IRS Form 4070 no later than April 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

April 15 – Taxpayers with Foreign Financial Interests

A U.S. citizen or resident, or a person doing business in the United States, who has a financial interest in or signature or other authority over any foreign financial accounts (bank, securities or other types of financial accounts), in a foreign country, is required to file Form FinCEN 114. The form must be filed electronically; paper forms are not allowed. The form must be filed with the Treasury Department (not the IRS) no later than April 15, 2019 for 2018. An extension of time to file of up to 6 months is automatically allowed. This filing requirement applies only if the aggregate value of these financial accounts exceeds $10,000 at any time during 2018. Contact our office for additional information and assistance filing the form.

April 15 –  Individual Tax Returns Due

File a 2018 income tax return (Form 1040) and pay any tax due. If you want an automatic six-month extension of time to file the return, please call this office. NOTE: The due date for individuals living in Maine or Massachusetts is April 17.

Caution: The extension gives you until October 15, 2019 to file your 2018 1040 return without being liable for the late filing penalty. However, it does not avoid the late payment penalty; thus, if you owe money, the late payment penalty can be severe, so you are encouraged to file as soon as possible to minimize that penalty. Also, you will owe interest, figured from the original due date until the tax is paid. If you have a refund, there is no penalty; however, you are giving the government a free loan, since they will only pay interest starting 45 days after the return is filed. Please call this office to discuss your individual situation if you are unable to file by the April 15 due date.

April 15 – Estimated Tax Payment Due (Individuals)

It’s time to make your first quarter estimated tax installment payment for the 2019 tax year. Our tax system is a “pay-as-you-earn” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-earn” requirement. These include:

  • Payroll withholding for employees;
  • Pension withholding for retirees; and
  • Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding.

When a taxpayer fails to prepay a safe harbor (minimum) amount, they can be subject to the underpayment penalty. This penalty is equal to the federal short-term rate plus 3 percentage points, and the penalty is computed on a quarter-by-quarter basis.

Federal tax law does provide ways to avoid the underpayment penalty. If the underpayment is less than $1,000 (the “de minimis amount”), no penalty is assessed. In addition, the law provides “safe harbor” prepayments. There are two safe harbors:

  • The first safe harbor is based on the tax owed in the current year. If your payments equal or exceed 90% of what is owed in the current year, you can escape a penalty.
  • The second safe harbor is based on the tax owed in the immediately preceding tax year. This safe harbor is generally 100% of the prior year’s tax liability. However, for taxpayers whose AGI exceeds $150,000 ($75,000 for married taxpayers filing separately), the prior year’s safe harbor is 110%.

Example: Suppose your tax for the year is $10,000 and your prepayments total $5,600. The result is that you owe an additional $4,400 on your tax return. To find out if you owe a penalty, see if you meet the first safe harbor exception. Since 90% of $10,000 is $9,000, your prepayments fell short of the mark. You can’t avoid the penalty under this exception.

However, in the above example, the safe harbor may still apply. Assume your prior year’s tax was $5,000. Since you prepaid $5,600, which is greater than 110% of the prior year’s tax (110% = $5,500), you qualify for this safe harbor and can escape the penalty.

This example underscores the importance of making sure your prepayments are adequate, especially if you have a large increase in income. This is common when there is a large gain from the sale of stocks, sale of property, when large bonuses are paid, when a taxpayer retires, etc. Timely payment of each required estimated tax installment is also a requirement to meet the safe harbor exception to the penalty. If you have questions regarding your safe harbor estimates, please call this office as soon as possible.

CAUTION: Some state de minimis amounts and safe harbor estimate rules are different than those for the Federal estimates. Please call this office for particular state safe harbor rules.

April 15 – Last Day to Make Contributions

Last day to make contributions to Traditional and Roth IRAs for tax year 2018.

The Tax Filing Deadline Is Around the Corner

Article Highlights:

  • Extensions
  • Balance-Due Payments
  • Contributions to Roth or Traditional IRAs
  • Estimated Tax Payments for the First Quarter of 2019
  • Individual Refund Claims for the 2015 Tax Year

As a reminder to those who have not yet filed their 2018 tax returns, April 15, is the due date to either file a return (and pay the taxes owed) or file for an automatic six-month extension (and pay the an estimate of the taxes owed). Caution should be exercised when preparing the extension application, which is IRS Form 4868. Even though this form is described as “automatic,” the extension is automatically granted only if it includes a reasonable estimate of the 2018 tax liability and only if that anticipated liability is paid along with the extension voucher. It is not uncommon for taxpayers to enter zero as the estimated tax liability without figuring the actual estimated amount. These taxpayers risk the IRS classifying their forms as having been improperly completed, which in turn makes the extensions invalid. If you need an extension, please contact this office so that we can prepare a valid extension for you.

The extension must be filed in a timely manner; at this office, we can file your extension electronically before the due date. If you are mailing an extension, be advised that the envelope with the extension form must only be postmarked on or before the April 15 due date. However, there are inherent risks associated with dropping an extension form in a mailbox; for instance, the envelope might not be postmarked in a timely fashion. Thus, those who have estimated tax due should mail their extension forms using registered or certified mail so as not to risk late-filing penalties.

In addition, the April 15 deadline also applies to the following:

  • Balance-Due Payments for the 2018 Tax Year – Be aware that Form 4868 is an extension to file, NOT an extension to pay. The IRS will assess late-payment penalties (with interest) on any balance due, even when the extension has been granted. Taxpayers who anticipate having a balance due need to estimate this amount and include payment for that balance, either along with the extension request (as indicated above) or electronically (through the IRS website).
  • Contributions to a Roth or Traditional IRA for the 2018 Tax Year – April 15 is the last day for 2018 contributions to either a Roth or a traditional IRA. Form 4868 does not provide an extension for making IRA contributions.
  • Individual Estimated Tax Payments for the First Quarter of 2019 – Taxpayers – especially those who have filed for extension – should be aware that the first installment of estimated taxes for the 2019 tax year is due on April 15. Taxpayers who fail to prepay the minimum (“safe-harbor”) amount can be subject to a penalty for the underpayment of the estimated tax. This penalty is based on the interest on the underpayment, which is calculated using the short-term federal rate plus 3 percentage points. The penalty is computed on a quarter-by-quarter basis, so even people who have prepaid the correct overall amount for the year may be subject to the penalty if the amounts are not paid proportionally or in a timely way. Federal tax law does provide ways to avoid the underpayment penalty. For instance, if the underpayment is less than $1,000 (referred to as the de minimis amount), no penalty is assessed. In addition, there are two safe-harbor prepayments:1. The first safe-harbor prepayment is based on the tax owed on the current year’s return. There is no penalty when the prepayments (including both withholding and estimated payments) equal or exceed 90% the owed amount.

    2. The second safe-harbor prepayment is based on the total tax amount (not including credits for prepayments) on the return for the immediately preceding tax year. This is generally set at 100% of the prior year’s tax liability. However, taxpayers with adjusted gross income exceeding $150,000 (or $75,000 for married taxpayers filing separately) must pay 110% of the prior year’s tax liability.

  • Individual Refund Claims for the 2015 Tax Year – The regular three-year statute of limitations expires for the 2015 tax return on April 15 of this year. Thus, no refund will be granted for a 2015 return (original or amended) that is filed after April 15. Taxpayers could risk missing out on the refundable Earned Income Tax Credit, the refundable American Opportunity Tax Credit for college tuition, and the refundable child credit for the 2015 tax year if they do not file before the statute of limitations ends. Caution: The statute does not apply to balances due for unfiled 2015 returns.

If your return is still pending because of missing information, please forward that information to this office as quickly as possible so that we can ensure that your return meets the April 15 deadline. Keep in mind that the last week of tax season is very hectic, and your returns may not be completed in time if you wait until the last minute. If you know that the missing information will not be available before the April 15 deadline, then please let us know right away so that we can prepare an extension request (and 2019 estimated-tax vouchers, if needed).

If you have not yet completed your returns, please call this office right away so that we can schedule an appointment and/or file an extension.

March 2019 Business Due Dates

March 1 – Farmers and Fishermen

File your 2018 income tax return (Form 1040) and pay any tax due. However, you have until April 15 (April 17 if you live in Maine or Massachusetts) to file if you paid your 2018 estimated tax by January 15, 2019.

March 4 – Applicable Large Employer (ALE) – Form 1095-C

If you’re an Applicable Large Employer, provide the 2018 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to full-time employees. The normal due date for giving employees their copy of the 1095-C is January 31, 2019, but the IRS gave a blanket extension of 30 days to ALEs for 2019 filings.

March 15 – Partnerships

File a 2018 calendar year return (Form 1065). Provide each partner with a copy of Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., or a substitute Schedule K-1. If you want an automatic 6-month extension of time to file the return and provide Schedules K-1 or substitute Schedules K-1 to the partners, file Form 7004. Then, file Form 1065 and provide the K-1s to the partners by September 16.

March 15 – S-Corporations

File a 2018 calendar year income tax return (Form 1120S) and pay any tax due. Provide each shareholder with a copy of Schedule K-1 (Form 1120S), Shareholder’s Share of Income, Deductions, Credits, etc., or a substitute Schedule K-1 (Form 1120S). To request an automatic 6-month extension of time to file the return, file Form 7004 and pay the tax estimated to be owed. Then file the return; pay any tax, interest, and penalties due; and provide each shareholder with a copy of their Schedule K-1 (Form 1120S) by September 16.

March 15 – S-Corporation Election

File Form 2553, Election by a Small Business Corporation, to choose to be treated as an S corporation beginning with calendar year 2019. If Form 2553 is filed late, S treatment will begin with calendar year 2020.

March 15 – S-Corporations 

File a 2017-calendar year return (Form 1120S). Provide each shareholder with a copy of Schedule K-1 (Form 1120S Shareholder’s Share of Income, Deductions, Credits, etc., or a substitute Schedule K-1. If you want an automatic 6-month extension of time to file the return and provide Schedules K-1 or substitute Schedules K-1 to the shareholders, file Form 7004. Then, file Form 1120S and provide the K-1s to the shareholders by September 17.

March 15 – Social Security, Medicare and Withheld Income Tax

If the monthly deposit rule applies, deposit the tax for payments in February.

March 15 – Non-Payroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in February.