With so much to keep track of in the days of information overload, let’s take a little off your plate by foolproofing your upcoming tax deadlines.
Many of us are aware of the April 15th deadline. Depending on your line of work you may be aware of the various other deadlines that pass at the beginning of the year. For the purposes of this article, we will be focusing on two quickly approaching deadlines and whether they apply to you and your business.
September 15, 2021
A busy day for accountants and many small business owners, there are three deadlines that fall on September 15th. The first deals with tax withholdings.
For those of you that are self-employed, you will likely need to consider upcoming withholding payments. The September 15th withholding due date relates to income earned from June 1st to August 31st, of the same year.
When it comes to tax payments, the best way to avoid interest and penalties is to be on time. By submitting payments on time you will be kept on track for 2021 obligations while protecting yourself from unpleasant surprises.
Remember, this is in lieu of the traditional withholdings. Employee remittances would be calculated by an employer and sent on your behalf. If you are self-employed, you are operating by your own rules. This often includes how you pay yourself. To compensate for the traditional withholdings, you will be subject to quarterly withholding payments.
S Corp & Partnership Extensions
Did you file an extension for your 2020 taxes? There are two deadlines that fall on this date. First, if you own an S Corp the extension to file your Form 1120 is due. The same applies to partnerships filing an extension on their Form 1065.
October 15, 2021
This is the second tax deadline you should have on your calendar for the 2021 year. There are two deadlines that fall on this day. The first relates to corporations.
Corporations that filed an extension on their Form 1120 in the spring of 2021 will now need to submit those forms by October 15th, 2021.
Similar to the other returns mentioned, the personal extension deadline is October 15th. Forms and details relating to your return can vary widely from one person to the next. This is why we recommend working with an accountant especially if you own a business or have a more varied portfolio.
As you prepare for these upcoming deadlines, consider the following items that may be needed.
Key items for filing include sources of income, which may be:
- W-2 if you are an employee
- 1099’s if you provide services
- Profit & loss statements
- K-1s if you are a partner in a partnership
- Form 1098 for mortgage interest
Tax forms are incredibly important due to the IRS’s ability to match these forms. For every form issued to the IRS, the IRS is looking for the corresponding form to be reported somewhere else.
For example, when you are issued a Form 1099 by an organization you provided services to during the tax year, the entity issuing the form submits a corresponding document to the IRS. This alerts the IRS of all the payees, and thus, they are on the lookout for you, the recipient, to report the matching figures.
This concept extends to investment income, proceeds from a sale of real estate, distributions, etc. When in doubt, include any questionable forms in the content you share with your preparer and he or she can help you decipher a document’s importance.
Similarly, when in doubt, provide any documentation to your preparer for assistance. Expense items are critical as they, along with adequate tax planning strategies, are the items that help drive your taxable income down and therefore help to minimize your tax bill.
Expense items you will want to include are your:
- State and local real estate taxes
- Statements of insurance (general, liability, fire, or storm insurance)
- Mileage between properties
- Financial Statements detailing other business expenses
Also important are any capital expenditures incurred during the year. This is simply your large items purchased with a useful life extending beyond a year. For example, think office equipment or a new air conditioning unit for a property.
These items allow for varying degrees of write-offs depending on the depreciation rules in effect in the year of filing. Anything related to the business is generally fair game, but don’t go stretching the rules; whatever savings you may generate in the current year through a risky approach, will come back around through the scrutiny of an IRS audit.
These deadlines are quickly approaching and if you do not have someone on your side yet, now is the time. The 2020 and 2021 tax years have been exceptional, both from an economic and real estate perspective. We highly recommend continuing to strengthen your portfolio with the assistance of a strong tax planning partner like Katz Khayut and Stroll LLP. Contact us today at firstname.lastname@example.org.