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:
 CBC.ca | 'Soda tax' movement gains steam Vancouver Sun New York state is the latest American jurisdiction eyeing a "soda tax" to curb the obesity ... Soda Tax: Is New York Soaking the Poor? |
Green Party gubernatorial candidate wants to legalize, tax pot Bloomington Pantagraph SPRINGFIELD -- Rich Whitney, Green Party candidate for governor, on Thursday laid out his state budget plans, which included raising income taxes, ... Choice between cuts or higher taxes has consequences for Illinois business ... Tax Increase Is Sought To Aid Illinois Schools Rich Whitney, Green Party Governor Candidate, Announces Budget Proposals |
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The BC government sneaks another tax hike in through the back door Vancouver Sun -The BC Liberals rarely miss an opportunity to boast about the times they've cut taxes over the years. ... |
 Indiana's NewsCenter | Ind. House, Senate recess until Friday with jobless insurance tax, jobs ... CanadianBusiness.com The major sticking point appeared to be differences over a bill that would delay an unemployment insurance tax increase and provide tax breaks and ... Top Indiana lawmakers say Democrats, Republicans close to deals that could end ... Full Ind. House returns as session deadline nears; differences linger over ... |
Mississauga car dealer stung by tax fines Toronto Sun On top of the $183036 in back taxes and the $100000 fine, Revenue Canada says Gilani must also pay a $25000 surcharge to the Victims' Justice Fund. ... |
 National Post | Lower taxes for Toronto: Miller Toronto Sun (ALEX UROSEVIC, Toronto Sun file photo) He's using a surplus to balance the books and cut a planned property tax increase for 2010 to 2.9%. ... Toronto Mayor David Miller announces big surplus and lower tax increases Miller's media gambit Robert Silver |
 CBC.ca | NB to limit property tax increases: minister CBC.ca Finance Minister Greg Byrne says the government will introduce measures to limit property tax increases before the end of the legislative session. ... Property tax deferral is worth considering Property tax increases are hard on seniors |
Idaho Lawmaker: Bring a Bill to End Tax Exemptions New York Times By AP BOISE, Idaho (AP) -- Quit talking about repealing tax exemptions. Bring a bill to do it. That's the message Rep. Dennis Lake, the House Revenue and ... Kansas Legislature tables alcohol levy, but tobacco tax still alive House unanimous for HB 630, boosting tax credit for donations to IPTV, other ... Lawmakers more open to tax hikes |
 TopNews United States | Local affiliates here axed by Amazon.com The Colorado Statesman Senate Minority Leader Josh Penry, R-Grand Junction, said Monday that “when government raises taxes in a recession, it kills jobs. ... Colorado's feud with Amazon puts focus on national online tax efforts Opposing rising taxes Editorial: Make money talk in Amazon tax flap |
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