Tax Trap #3 -- IRS Penalties, Interest and Love Letters
As a small business owner or self-employed person, one of the easiest ways to keep Uncle Sam off your back and out of your life is to file your forms, payments and other paperwork on time.
Over the next four months there are several key dates that you dare not forget! Here they are -- all in one place, along with links to the IRS website PDF file for that particular form, where appropriate.
NOTE: This article only addresses federal tax deadlines. Be sure to contact your state's tax department for their due dates.
Also, the calendar is adjusted for Saturdays, Sundays and federal holidays, because if a due date falls on a Saturday, Sunday, or federal holiday, then the due date is moved to the next business day.
JANUARY:
Tuesday, Jan. 18
Personal
If you pay quarterly estimated income tax payments, it's time to make the fourth-quarter payment for 2004 via Form 1040-ES. http://www.irs.gov/pub/irs-pdf/f1040es.pdf
Business
If you have employees, you must make the federal payroll tax payment for December 2004 by today (assuming you are on the monthly deposit schedule).
You use Form 8109 (found in the little yellow coupon book) or the IRS Electronic Federal Tax Payment System (EFTPS).
Monday, January 31
Business
4th quarter and year-end payroll tax returns are due by January 31 of the following year.
Here's an overview of the 4 most common federal payroll-related forms due today:
1. Form W-2 (for your employees) http://www.irs.gov/pub/irs-pdf/fw2.pdf
If you mail the W-2's, the postmark must be on or before January 31, 2005.
You may also be a recipient of a W-2 (if you work as an employee for someone else), so don't give your employer a hard time unless the W-2 is postmarked, or delivered in person, later than January 31.
2. Form 941 (for payroll tax) http://www.irs.gov/pub/irs-pdf/f941.pdf
3. Form 940 (for unemployment tax) http://www.irs.gov/pub/irs-pdf/f940.pdf
4. Form 1099-MISC If you paid any independent contractors at least $600 in 2004, you must send each one a 1099 by January 31. http://www.irs.gov/pub/irs-pdf/f1099msc.pdf
Tip: if the independent contractor is a corporation, you usually don't have to issue a 1099. The main purpose of the 1099 is to track payments to Sole Proprietors, i.e. unincorporated self-employed people.
FEBRUARY:
Tuesday, Feb. 15
If you have employees, you must make the federal payroll tax payment for January 2005 by today (assuming you are on the monthly deposit schedule).
Monday, February 28
If you prepared any W-2's or 1099's (mentioned above), today is the deadline for sending a copy of those forms to the IRS.
Form W-3 is sent to the Social Security Administration, along with Copy A of any Forms W-2 you issued. http://www.irs.gov/pub/irs-pdf/fw3.pdf
Form 1096 is sent to the IRS, along with Copy A of any Forms 1099-MISC you issued. http://www.irs.gov/pub/irs-pdf/f1096_04.pdf
MARCH:
Business
Tuesday, March 15
Today is a big day if your business is a corporation.
Form 1120 -- the annual corporate income tax return for regular "C" corporations. http://www.irs.gov/pub/irs-pdf/f1120.pdf
Form 1120S -- the annual corporate income tax return for "S" corporations. http://www.irs.gov/pub/irs-pdf/f1120s.pdf
Form 7004 -- if you can't file Form 1120 or 1120S by today, here's a tip: just file Form 7004 by March 15 and you are granted an automatic, no-questions-asked 6-month extension of time to file the return (i.e. until Sept. 15, 2005) http://www.irs.gov/pub/irs-pdf/f7004.pdf
Form 2553 -- if you want your corporation to be treated like an "S" corporation for the first time, today is the deadline for telling the IRS that you want to be an "S" corp beginning with calendar year 2005. http://www.irs.gov/pub/irs-pdf/f2553.pdf
Also, If you have employees, you must make the federal payroll tax payment for February 2005 by today (assuming you are on the monthly deposit schedule).
APRIL:
Friday, April 15
Ah, yes, the most famous tax deadline of all.
Form 1040
http://www.irs.gov/pub/irs-pdf/f1040.pdf
And if you are a Sole Proprietor, don't forget that you must file several business-related tax forms with your Form 1040.
The most commonly used tax forms for the self-employed person include:
Schedule C (to report your business income and expenses) http://www.irs.gov/pub/irs-pdf/f1040sc.pdf
Schedule SE (for self-employment tax) http://www.irs.gov/pub/irs-pdf/f1040sse.pdf
Form 4562 (to deduct equipment and other depreciable property) http://www.irs.gov/pub/irs-pdf/f4562.pdf
Form 8829 (to deduct a home office) http://www.irs.gov/pub/irs-pdf/f8829.pdf
Need more time to prepare your personal tax return? Go no further than Form 4868, which grants an automatic no-questions-asked 4-month extension to file the return. http://www.irs.gov/pub/irs-pdf/f4868.pdf
NOTE: this is only an extension of time to file the return, not an extension to pay any tax due. So if you think you might owe, it may be wise to estimate what you owe and send in a payment with Form 4868; otherwise you may have to pay extra in late payment penalties and interest.
Form 1065
If your business is a Partnership or Limited Liability Company (LLC), today is also your lucky day to file the annual business income tax return -- via Form 1065. http://www.irs.gov/pub/irs-pdf/f1065.pdf
Form 8736
To get an automatic 3-month extension of time to file Form 1065, file Form 8736 on or before April 15. http://www.irs.gov/pub/irs-pdf/f8736.pdf
As if April 15 wasn't already painful enough, it's also the deadline for the first quarter estimated tax payment for Year 2005:
Personal -- Form 1040-ES.
http://www.irs.gov/pub/irs-pdf/f1040es.pdf
Corporate -- Form 1120-W
http://www.irs.gov/pub/irs-pdf/f1120w.pdf
And if you're an employer, yup, it's time for yet another monthly federal payroll tax deposit -- for March 2005.
MAY:
Monday, May 2
Form 941 is due for the 1st quarter 2005. http://www.irs.gov/pub/irs-pdf/f941.pdf
Form 940 federal unemployment tax deposit is due today, if your first quarter liability exceeds $100.
Had enough? OK, OK. I'll stop here.
That should get you through the first four months of the year.
For more tax resources, here's a few more links:
Looking for a federal tax form? http://www.irs.gov/formspubs/index_business_personal_taxes.php
Looking for a state tax form? http://taxes.yahoo.com/stateforms_business_personal_taxes.php http://www.taxadmin.org/fta/link/forms_business_personal_taxes.php
IRS Website for Small Business & the Self-Employed http://www.irs.gov/smallbiz
Wayne M. Davies is author of 3 tax-slashing eBooks for the self-employed, available separately or as a 3-volume set, "The Ultimate Small Business Tax Reduction Guide". http://www.YouSaveOnTaxes.com/ultimate-guide
To get your free copy of Wayne's 25-page report, "How To Instantly Double Your Deductions" visit: http://www.YouSaveOnTaxes.com
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MORE RESOURCES:
 KOMO News | Wash. lawmakers: Tax compromise could be possible BusinessWeek Legislative leaders were more optimistic Thursday that compromise might be possible on an $800 million tax package to help bridge ... Wash. lawmakers say tax compromise possible DFLers look to DC for lifeline Senate Committee says no to new taxes |
 Times Online | Damning papers reveal William Hague would have known about Lord Ashcroft's tax ... Mirror.co.uk William Hague faced calls to quit yesterday after "lying" about Tory donor Lord Ashcroft's tax status. ... Cameron and Hague under pressure to sack 'non-dom' Ashcroft Lord Ashcroft: the peer's entrance |
Tax officials find bonanza of offshore income Globe and Mail 19, 2010 9:50AM EDT Crunch time for tax filers is still weeks away, but Canada Revenue Agency can already boast that it has unearthed six times more ... This could be the year for a nice, big refund from Ottawa |
The tax man cometh National Post The Ontario government is introducing the Harmonized Sales Tax (HST). The existing Provincial Sales Tax and federal Goods and Services Tax will be combined ... Sales Tax Harmonization reduces your bottom line? |
Credit Suisse clients, staff face German tax probe Reuters DUESSELDORF, Germany, March 19 (Reuters) - German prosecutors have launched 1100 tax evasion probes against clients of Swiss bank Credit Suisse (CSGN. ... |
 The Hindu | How one firm may use Obama jobs bill Computerworld The legislation provides an exemption from Social Security payroll taxes for every worker hired this year who has been unemployed for 60 days. ... Jobs Bill Becomes Law Jobs bill offers tax breaks for hiring Obama to sign bill to spur job growth |
 CBC.ca | 4.5% property tax hike proposed for Regina CBC.ca (CBC) The City of Regina portion of property taxes could go up 4.5 per cent, a budget proposal released Friday says. That's the amount the city says it ... Regina residents facing biggest tax hike since Mayor Pat Fiacco took office |
Mayors fear province will create new tax for TransLink Globe and Mail Mr. Trasolini said provincial representatives have been saying for years that they believed the region could put more into transit costs from property taxes ... Bond, mayors head talk TransLink Evergreen Line faces familiar speed bumps |
 The Guardian (blog) | Mandelson denies post-election tax rises planned BBC News Lord Mandelson has sparked speculation Labour will put taxes up again if they win the election after saying economic conditions could make it "necessary". ... Labour warns of more tax rises next year Mandelson opens door to more tax rises We may raise taxes, says Lord Mandelson |
Regional District taxes on the way up Canada.com Tax increases are definitely on the way for property owners throughout in the Comox Valley. ... |
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