New Tax Due Dates & Extension Periods

New Tax Due Dates & Extension Periods for Most Entities for Tax Year 2016

Many bills that Congress passes contain provisions that affect items that aren’t related to the main bill. The “Surface Transportation and Veteran’s Health Care Choice Improvement Act of 2015” is one such bill. Primarily a stopgap extension of the Highway Trust Fund, this bill also includes tax provisions that impact the due dates of a number of returns and other required filings.

The due date changes with the most impact will likely be those changes for partnership tax returns (Form 1065) and C Corporation tax returns. Essentially the due dates have swapped. The significant reorganization of due dates is intended to assist individuals involved in pass-through entities in receiving information required to prepare their individual returns in a more timely fashion.

For tax returns reporting 2016 information that are due in 2017, the following due date changes will apply.  These changes are effective for tax years beginning after December 31, 2015 for calendar year filers (tax year 2016 and beyond):

Form 2016 Filing Due Date(Tax   Year 2015) 2017 Filing Due Date(Tax Year 2016)
Form 1065 – Partnerships April 15th March 15th
Form 1065 Extension September 15th September 15th
C Corporations March 15th April 15th
S Corporations March 15th March 15th
C Corporations & S Corporation Extensions September 15th September 15th
Form 1040 Individual April 15th April 15th
Form 1120 C Corporation w/June 30 Fiscal Year September 15th September 15th
C Corporation Extension w/June 30 Fiscal Year March 15th April 15th
C CorporationFiscal   Year End (other than Dec. 31 or June 30) 15th day of 3rd month after year-end 15th day of 4th month after year-end
C Corporation Extension Fiscal Year End (other than Dec. 31 or June 30) 15th day of 9th monthafter year-end 15th day of 10th month after year-end
Form 1040 Extension October 15th October 15th
Form 1041 Trust & Estate April 15th April 15th
Form 1041 Extension September 15th September 30th
Form 5500 series –   Employee Benefit Plan July15th July 15th
Form 5500 series – Employee Benefit Plan Extension October 15th October 15th
Information Returns (i.e., W-2 and 1099s) To   IRS/SSA — Feb. 28 andMarch 31 if filed electronically Forms   W-2 and certain 1099-MISC due to IRS/SSA Jan. 31. All other Forms 1099 due   Feb. 28; March 31 if filed electronically

For fiscal year filers:

  • Partnership and S Corporation tax returns will be due the 15th day of the third month after the end of their tax year. The filing date for S Corporations is unchanged.
  • C Corporation tax returns will be due the 15th day of the fourth month after the end of the tax year.  A special rule to defer the due date change for C Corporations with fiscal years that end on June 30 defers the change until December 31, 2025 – a full ten years.

Other changes include:

  • Filers of U.S. Return of Partnership Income (Form 1065) will have a longer extension period, a maximum of six months, rather than the current five month extension, leaving the current (2015 and prior years) extended due date in place (September 15th for calendar year taxpayers.)
  • U.S. Income Tax Return for Estates and Trusts (Form 1041) will have a maximum extension of five and a half months, two weeks longer than the current (2015 and prior years) five month extension.
  • Annual Return/Report of Employee Benefit Plans will have a maximum automatic extension of three and a half months.
  • The Foreign Bank and Financial Accounts Report (FinCEN Report 114, FBAR) will be due on April 15th and permitted to extend for six months, thus aligning the FBAR reporting with the individual tax return reporting. Additionally, the IRS may waive the penalty for failure to file a timely extension request for any taxpayer required to file for the first time.

If you have any questions about these new due dates and/or the impact on your tax filings, please contact Alice, our qualified tax professional at (928)680-1300

 

2015 Year-End Reminders

2015 Year-End Reminders

IRA Reminders

Individual Retirement Accounts, or IRAs, are important vehicles for you to save for retirement. If you have an IRA or plan to start one soon, there are a few key year-end rules that you should know. Here are the top year-end IRA reminders from the IRS:

  • Know the contribution and deduction limits.  You can contribute up to a maximum of $5,500 ($6,500 if you are age 50 or older) to a traditional or Roth IRA. If you file a joint return, you and your spouse can each contribute to an IRA even if only one of you has taxable compensation. You have until April 18, 2016, to make an IRA contribution for 2015. In some cases, you may need to reduce your deduction for your traditional IRA contributions. This rule applies if you or your spouse has a retirement plan at work and your income is above a certain level.
  • Avoid excess contributions.  If you contribute more than the IRA imits for 2015, you are subject to a six percent tax on the excess amount.The tax applies each year that the excess amounts remain in your account. You can avoid the tax if you withdraw the excess amounts from your account by the due date of your 2015 tax return (including extensions).
  • Take required distributions.  If you’re at least age 70½, you must take a      required minimum distribution, or RMD, from your traditional IRA. You are not required to take a RMD from your Roth IRA. You normally must take your RMD by Dec. 31, 2015. That deadline is April 1, 2016, if you turned 70½ in 2015. If you have more than one traditional IRA, you figure the RMD separately for each IRA. However, you can withdraw the total amount from one or more of them. If you don’t take your RMD on time you face a 50 percent excise tax on the RMD amount you failed to take out.
  • IRA distributions may affect your premium tax credit. If you take a distribution from your IRA at the end of  the year and expect to claim the PTC, you should exercise caution regarding the amount of the distribution.  Taxable distributions      increase your household income, which can make you ineligible for the PTC.  You will become ineligible if the increase causes your household income for the year to be above 400 percent of the Federal poverty line for your family size. In this circumstance, you must repay the entire amount of any advance payments of the premium tax credit that were made to your health insurance provider on your behalf.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

Additional IRS Resources:

Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts

Review Investment Gains and Losses
Consider selling investment losers to offset any capital gains. When calculating your gains and losses, be sure to include mutual fund distributions; they are taxable gains even when you hold onto the shares. You may want to sell appreciated securities before year-end (or donate them to charity; see #7 below). If you have excess losses, they may be carried forward into future tax years, at a rate of no more than $3,000 each year.

Make Charitable Contributions
You can make year-end gifts to charity with cash or with appreciated securities. If you donate appreciated securities (like stocks), you can take a deduction for the current fair market value.

If you decide to make gifts in cash, you can simply write a check. Or you can put the amount on a credit card in December, pay the bill when it arrives in 2016 and deduct the donation in 2015. Either way, you must submit a letter of acknowledgment from the charity, showing the date of the gift, the amount, and whether you received any tangible benefit in exchange, such as a thank you gift.

Donations of used cars may be deducted at fair market value only if the charity uses the vehicle in its tax-exempt work. If the charity sells it, your contribution is limited to the actual proceeds of the sale.

Make Your House Energy-Efficient
If you make qualified energy-saving home improvements by the end of 2015, you can claim a tax credit of up to 30% of the costs. The improvements must meet federal energy-efficiency standards in order to qualify for the credit. For more information, go to www.EnergyStar.gov

Don’t Fall for New Tax Scam Tricks by IRS Posers

copied and posted directly from the IRS Summertime Tax Tip 2015


Don’t Fall for New Tax Scam Tricks by IRS Posers

Though the tax season is over, tax scammers work year-round. The IRS advises you to stay alert to protect yourself against new ways criminals pose as the IRS to trick you out of your money or personal information. These scams first tried to sting older Americans, newly arrived immigrants and those who speak English as a second language. The crooks have expanded their net, and now try to swindle virtually anyone. Here are several tips from the IRS to help you avoid being a victim of these scams:

  • Scams use scare tactics.  These aggressive and sophisticated scams try to scare people into making a false tax payment that ends up with the criminal. Many phone scams use threats to try to intimidate you so you will pay them your money. They often threaten arrest or deportation, or that they will revoke your license if you don’t pay. They may also leave “urgent” callback requests, sometimes through “robo-calls,” via phone or email. The emails will often contain a fake IRS document with a phone number or an email address for you to reply.
  • Scams use caller ID spoofing.  Scammers often alter caller ID to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legit. They may use online resources to get your name, address and other details about your life to make the call sound official.
  • Scams use phishing email and regular mail.  Scammers copy official IRS letterhead to use in email or regular mail they send to victims. In another new variation, schemers provide an actual IRS address where they tell the victim to mail a receipt for the payment they make. All in an attempt to make the scheme look official.
  • Scams cost victims over $20 million.  The Treasury Inspector General for Tax Administration, or TIGTA, has received reports of about 600,000 contacts since October 2013. TIGTA is also aware of nearly 4,000 victims who have collectively reported over $20 million in financial losses as a result of tax scams.

The real IRS will not:

  • Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.
  • Demand that you pay taxes and not allow you to question or appeal the amount that you owe.
  • Require that you pay your taxes a certain way. For instance, require that you pay with a prepaid debit card.
  • Ask for credit or debit card numbers over the phone.
  • Threaten to bring in police or other agencies to arrest you for not paying.

If you don’t owe taxes or have no reason to think that you do:

  • Do not provide any information to the caller. Hang up immediately.
  • Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.
  • You should also report it to the Federal Trade Commission. Use the “FTC      Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.

If you know you owe, or think you may owe taxes:

  • Call the IRS at 800-829-1040. IRS workers can help you if you do owe taxes.

Stay alert to scams that use the IRS as a lure. For more, visit “Tax Scams and Consumer Alerts” on IRS.gov.

IRS YouTube Videos:

IRS Podcasts:

College Financial Aid Forms – When and Where

When do I need to submit college financial aid forms?

It depends on the form you’re filling out and whether your child is a new college student or a returning student.

College deadlines for the federal government’s financial aid form, the FAFSA, might be anywhere from February 1 to April 1 for both new and returning students. But it’s in your best interest to submit the FAFSA as soon after January 1 as possible (it can’t be submitted before January 1) because some government aid programs operate on a first-come, first-served basis.

The FAFSA relies on tax information from the previous year, so it’s helpful to have your tax return already completed.  However, if you don’t, you can still file the FAFSA using estimated numbers and then go back later and update your FAFSA with final tax numbers once you’ve completed your tax return (the government offers an online  tool–the IRS Data Retrieval Tool–that allows you to import your  tax information directly into your FAFSA). The FAFSA captures two data points: the financial picture of  both the parent(s) and the student for the previous year.

The main financial aid form that most colleges use to distribute their own aid, the CSS Profile, is due anywhere from February 1 to March 1 for new students applying to college regular decision (or November 1 to December 1 for new students applying early decision or early action) and by April 15 for returning students. The CSS Profile captures six data points: the financial picture of both the parent(s) and student for the previous year, and an estimated financial picture of parent(s) and student for the current year and for the following year.

Even if you don’t think your child will qualify for need-based federal financial aid, you should consider submitting the FAFSA if: (1)  you want your child to be eligible for an unsubsidized Stafford Loan (a non-need-based federal student loan available to any student); and/or (2) you want your child to be considered for college need-based aid–colleges  generally require both  the FAFSA and the CSS Profile before they will consider your child for college need-based aid.

Both the FAFSA and the CSS Profile can be submitted online … click here: http://www.fafsa-application.com/home.php?s=MSN, and you must file them for each year that you want your child to be considered for aid.

AVOIDING COMMON BUSINESS MISTAKES

How to Avoid Common Business Mistakes

It is not uncommon for business owners to become so involved with their day-to-day operations that they overlook some important issues associated with being in business. Here are some tips to help you avoid making costly mistakes and to ensure that your business runs smoothly.

Minimize personal liability. Individuals should try to avoid putting their personal assets at risk when they enter into a business venture whether solely or with others. Many overlook or dismiss the fact that personal liability can be minimized with the proper business structure. There are several types of entity forms that afford different degrees of protection, but there is no perfect entity that will provide an all-purpose, one-size-fits-all protection. Included among the various entity options for business owners are sole proprietorships, partnerships, corporations, s-corporations, and limited liability companies. In addition to liability protection, when choosing an entity, take into account the character of the business, the business partners you have, your options for exiting the business, and your estate plan.
Consider a buy-sell agreement. When partners first go into business together, they do so with high expectations and mutual respect. A joint business venture is like a marriage, and often, it ends in a divorce. A binding buy-sell agreement is probably one of the most important documents that a business with multiple owners can have. Typically, a buy-sell agreement is entered into by the owners of a business, and possibly the business entity itself, to purchase or sell interests of the business at a preset price or formula in the event of a future occurrence that will impact the operation and continuance of the business. Such events are numerous and can include death, disability, divorce, disagreement, or retirement. Imagine your business partner passing away and his or her heirs or surviving spouse stepping in as a partner.
Hold shareholder and board meetings. “Piercing the corporate veil” is terminology we hear associated with court cases when someone is attempting to go around the liability protection provided through an entity such as a corporation. Courts can “pierce the corporate [or business] veil” and hold the business owner personally liable for failure to conduct the business properly. Failure to hold the required meetings and maintain a minutes book is one indicator that a business is not being run as a corporation but rather by an individual or group of individuals. Bottom line…Hold the required meetings and maintain the minutes book.
Plan for family business succession. Determine whether there is a desire by a family member or members to participate in the business. If family succession is anticipated, then the business should be organized in a type of entity that lends itself to transfers of entity interests to family members with little or no loss of management or control, such as family-limited partnerships, limited liability companies, and subchapter s-corporations. The main goal is to allow the donor to retain control and derive income from the entity while removing considerable estate value through gifts of interests or making gifts using the applicable exemption amount ($1 million) or the annual gift tax exclusion amount. An understanding of estate and gift tax ramifications of gifts of entity interests, such as valuation issues and available discounts, is also crucial.
Understand the tax ramifications of your actions. Just about everything that we do that is related to business, investments, and retirement has tax ramifications. Many individuals fail to consider these ramifications, and they find themselves caught in tax traps or miss out on available tax deductions and credits, at significant cost. What we do know is that Congress has not, and probably will not, let a year go by without making changes to the tax code. Before making any major decisions such as purchasing a new business, making substantial purchases for an existing business, buying equipment for an existing one, setting up a retirement plan, selling a business or investment asset, or making investments, investigate the tax ramifications beforehand so that you can structure the course of action in a way that provides the most tax benefits.
If you need assistance with any of the above, please give our office a call so that we might help you directly or refer you to someone who can assist with your particular situation.

Tax Due Dates for January 2013

 

January 10 Employees – who work for tips. If you received $20 or more in tips during December, report them to your employer. You can use Form 4070, Employee’s Report of Tips to Employer.
January 15 Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in December 2012.

Individuals – Make a payment of your estimated tax for 2012 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES. This is the final installment date for 2012 estimated tax. However, you do not have to make this payment if you file your 2012 return (Form 1040) and pay any tax due by January 31, 2013.

Employers – Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in December 2012.

Farmers and Fishermen – Pay your estimated tax for 2012 using Form 1040-ES. You have until April 15 to file your 2012 income tax return (Form 1040). If you do not pay your estimated tax by January 15, you must file your 2012 return and pay any tax due by March 1, 2013, to avoid an estimated tax penalty.

January 31 Employers – Give your employees their copies of Form W-2 for 2012 by January 31, 2013. If an employee agreed to receive Form W-2 electronically, post it on a website accessible to the employee and notify the employee of the posting by January 31.

Businesses – Give annual information statements to recipients of 1099 payments made during 2012.

Employers – Federal unemployment tax. File Form 940 for 2012. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you already deposited the tax for the year in full and on time, you have until February 11 to file the return.

Employers – Social Security, Medicare, and withheld income tax. File Form 941 for the fourth quarter of 2012. Deposit any undeposited tax. (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 February 11 to file the return.

Employers – Nonpayroll taxes. File Form 945 to report income tax withheld for 2012 on all nonpayroll items, including backup withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit any undeposited tax. (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 year in full and on time, you have until February 11 to file the return.

Individuals – who must make estimated tax payments. If you did not pay your last installment of estimated tax by January 15, you may choose (but are not required) to file your income tax return (Form 1040) for 2012. Filing your return and paying any tax due by January 31 prevents any penalty for late payment of last installment.

Payers of Gambling Winnings – If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W-2G.

Certain Small Employers – File Form 944 to report Social Security and Medicare taxes and withheld income tax for 2012. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more from 2012 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return.

Tax Season Opens Jan. 30 For 1040 Filers per IRS

NEWS UPDATE FROM THE IRS

Tuesday, January 8, 2013

IRS Plans Jan. 30 Tax Season Opening For 1040 Filers

IRS News Release

IR-2013-2, Jan. 8, 2013

WASHINGTON — Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing individual income tax returns on Jan. 30.

The IRS will begin accepting tax returns on that date after updating forms and completing programming and testing of its processing systems. This will reflect the bulk of the late tax law changes enacted Jan. 2. The announcement means that the vast majority of tax filers — more than 120 million households — should be able to start filing tax returns starting Jan 30.

The IRS estimates that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits. Most of those in this group file more complex tax returns and typically file closer to the April 15 deadline or obtain an extension.

“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”

The IRS will not process paper tax returns before the anticipated Jan. 30 opening date. 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.

“The best option for taxpayers is to file electronically,” Miller said.

The opening of the filing season follows passage by Congress of an extensive set of tax changes in ATRA on Jan. 1, 2013, with many affecting tax returns for 2012. While the IRS worked to anticipate the late tax law changes as much as possible, the final law required that the IRS update forms and instructions as well as make critical processing system adjustments before it can begin accepting tax returns.

The IRS originally planned to open electronic filing this year on Jan. 22; more than 80 percent of taxpayers filed electronically last year.

Who Can File Starting Jan. 30?

The IRS anticipates that the vast majority of all taxpayers can file starting Jan. 30, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.

Who Can’t File Until Later?

There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March; a specific date will be announced in the near future.

The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available on IRS.gov.

As part of this effort, the IRS will be working closely with the tax software industry and tax professional community to minimize delays and ensure as smooth a tax season as possible under the circumstances.

Some Forms Delayed Until At Least Late February

Many of the forms needed by many of or clients require extensive programming changes by the IRS and will be delayed until at least late February. The following tax forms will be accepted by the IRS in late February or into March after updating forms and completing programming and testing of its processing systems.  (A specific date will be announced in the near future.)

  •     Form 3800 General Business Credit
  •     Form 4136 Credit for Federal Tax Paid on Fuels
  •     Form 4562 Depreciation and Amortization (Including Information on Listed Property)
  •     Form 5074 Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands
  •     Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations
  •     Form 5695 Residential Energy Credits
  •     Form 5735 American Samoa Economic Development Credit
  •     Form 5884 Work Opportunity Credit
  •     Form 6478 Credit for Alcohol Used as Fuel
  •     Form 6765 Credit for Increasing Research Activities
  •     Form 8396 Mortgage Interest Credit
  •     Form 8582 Passive Activity Loss Limitations
  •     Form 8820 Orphan Drug Credit
  •     Form 8834 Qualified Plug-in Electric and Electric Vehicle Credit
  •     Form 8839 Qualified Adoption Expenses
  •     Form 8844 Empowerment Zone and Renewal Community Employment Credit
  •     Form 8845 Indian Employment Credit
  •     Form 8859 District of Columbia First-Time Homebuyer Credit
  •     Form 8864 Biodiesel and Renewable Diesel Fuels Credit
  •     Form 8874 New Markets Credits
  •     Form 8900 Qualified Railroad Track Maintenance Credit
  •     Form 8903 Domestic Production Activities Deduction
  •     Form 8908 Energy Efficient Home Credit
  •     Form 8909 Energy Efficient Appliance Credit
  •     Form 8910 Alternative Motor Vehicle Credit
  •     Form 8911 Alternative Fuel Vehicle Refueling Property Credit
  •     Form 8912 Credit to Holders of Tax Credit Bonds
  •     Form 8923 Mine Rescue Team Training Credit
  •     Form 8932 Credit for Employer Differential Wage Payments
  •     Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit

Updated information will be posted on www.irs.gov

FAFSA (Free Application for Federal Student Aid)

Clients who are applying for financial aid for their college-aged children often ask us for help in completing their FAFSA (Free Application for Federal Student Aid). The FAFSA is used to determine the family’s financial need and includes information from the tax return.

The IRS now has a Data Retrieval Tool http://www.fafsa.ed.gov/help/irshlp9.htm that enables a parent or student to access and transfer their tax return information directly to the FAFSA. Using this tool will ensure the FAFSA has accurate information and also means a copy of the tax return will not have to be submitted.

The tool is available on the FAFSA website. If the student or parents qualify, they will be given the opportunity to retrieve, display and transfer their federal  tax information. To qualify, one must have a valid Social Security Number, filed a current (i.e. 2011) tax return and not have changed their marital status since December 31 of that tax year.

A  very handy Help tool is also available on the FAFSA website. I have provided all the necessary links (in blue) - Just click on them and it will take you there.

Welcome

Welcome to the New ABS Website. I am looking forward to getting this site up and running as soon as possible. However, with it being tax season, this process may take a little longer than I would hope. So, please be patient and check back often to see how we are progressing.

Hopefully, this process will be as easy as I am being told and I can learn the ropes pretty quickly and make it happen.

Please feel free to contact us if you have any questions. If you would like to send me an email, you can click the Contact page and there you will find a form that you can fill out and have sent to me. I promise to get back to you as soon as possible.

- Alice