While your filing is due in , there are clear tax law requirements as well as strategic steps you should take on a quarterly basis throughout At this point in any given year, most businesses are primarily focused on their prior year tax return. That said, while it may feel very early in the year, profitable businesses will also need to get a jump start on their filings. Businesses that are profitable are responsible for paying estimated tax on their income.
Paying this tax correctly and on time will prevent profitable taxpayers from paying tax penalties when they go to file an annual return. When taxpayers underpay on their estimated quarterly income taxes, they may pay penalties even if they receive a refund. Necessary financial statements include a balance sheet and profit and loss statement. Safe harbor gives profitable businesses the option to use their prior year tax liability to determine their quarterly tax responsibility.
While this is specific to federal taxes, safe harbor rules can vary on a state level. In some cases, taxpayers with a much smaller tax liability in the current year as compared to the prior year will end up overpaying. We highly doubt individuals and organizations are interested in giving the IRS an interest-free loan until they claim a refund the following year.
The end of quarter one is a great time to refine strategies. With a good chunk of performance data, taxpayers can now look at how Q1 performance measured up against their financial goals for the year. Use the reports mentioned in this webinar to get started. From there, planning where to allocate resources spend and save can help taxpayers devise what the tax situation will look like for A few things to consider:.
Take the time to give these considerations lots of attention, research, and inspection. Talking to a tax expert can give you an outside opinion as well. Need a tax expert? Start here. As with quarter one, profitable business taxpayers must provide a second installment of estimated income tax for Taxpayers can still use the Safe Harbor method did I mention you can use it year-round? Tax activities pick back up in quarter three, especially for taxpayers who have filed for an automatic extension for their tax filing.
The only date to keep track of for filing purposes is the due date for the third installment of estimated income tax for profitable businesses:. Timing is everything when it comes to taxes. Luckily, the IRS throws taxpayers a bone each year and lets most business owners and individuals request an automatic six month extension. This pushes back the due date for taxpayers individuals, corporations, partnerships, etc.
A business must pay their full tax liability by their original due date or else interest and late payment penalties will apply. This IRS lifeline should be used to buy enough time to ensure that a taxpayer has everything that their CPA needs for maximum efficiency.
You can ask for those repercussions to be waived, but that leaves you at the mercy of the IRS. A similar thing happened in , when taxes were also due on April 18 instead of April Those who file in Maine and Massachusetts get an extra day due to Patriots Day. Therefore, if you file in either of these states, you'll have until Wednesday, April 19, to submit your taxes and make any necessary tax payments.
I mean, really -- it's only right that a holiday named "Patriots Day" would push off a tax deadline. The last day to make a contribution to an IRA for any tax year is when taxes are due.
Thus, since taxes are due on April 18, , that's the last day to make a contribution to your individual retirement account for the tax year. Making a contribution to an IRA before the tax deadline is a great way to catch up if you didn't maximize your IRA contribution during the last calendar year. It's not just a smart decision for your future; making a contribution to a traditional IRA can potentially reduce taxes you owe or result in a larger refund for the tax year. It's not always possible to get your tax returns filed before the April deadline.
Some tax forms get lost in the mail, and your accountant might not have time to squeeze you in before the April 18 deadline. Life happens. But the IRS is pretty forgiving. Many employers offer to match a portion of what you save, meaning that if you contribute enough to your account, you'll also nab some free money.
Contributions to a traditional IRA can be tax-deductible. You have until the May 17, , tax deadline to contribute to an IRA, either Roth or traditional, for the tax year. See all the rules here. This medical account, available to individuals who have a high-deductible health plan, provides a tax-saving way to pay for out-of-pocket costs. You have until the May 17, , tax deadline to contribute to an HSA for the tax year.
This will buy most taxpayers until Oct. See more about how extensions work. Note: A tax extension gets you more time to file your return, not more time to pay your taxes. You still must pay any tax you owe, or a good estimate of that amount, by the tax deadline. Include that payment with your extension request or you could face a late-payment penalty on the taxes due. Be sure to find out when your local Tax Day is.
Most taxpayers face state income taxes , and most of the states that have an income tax follow the federal tax deadline. Ask your state's tax department: When are taxes due? And if necessary, ask: How do I get an extension? For , Tax Day was originally April 15, but as part of the government's ongoing coronavirus response, Tax Day was moved to May The tax deadline in is May If you need to make an estimated tax payment for the first quarter, that payment was due on April 15, though.
If you request a tax extension by May 17, you can have until October 15 to file your taxes. For do-it-yourselfers looking for an online tax software program that gives you a lot of bang for the buck, check out Kiplinger's Best Values in Tax Software for to see which products offer the best overall value.
If you're looking for a professional to handle your return, see our 5 Tips for Finding a Tax Preparer. If you can't file your income tax return on time, you can get an extension until October However, to get the extension, you have to request it before midnight tonight.
To make the request, either file Form or make an electronic tax payment. Just remember that the extension to file your return doesn't extend the time to pay your tax. You still have to estimate the amount of tax you'll owe and pay your tax bill by the May 17 tax deadline.
If you don't, the IRS will charge you interest on the unpaid balance and tack on additional late-payment penalties. If you want to put more money in an IRA and have it count towards contributions, you'll have to do it today. Normally, you have until the tax return filing deadline for the year — typically April 15 — to make contributions for any given year.
If you haven't already maxed out your IRA contributions, doing so before the May 17 tax deadline can be a smart move. So, whether you contribute to a traditional or a Roth IRA, you can cut your tax bill now or in the future.
That means you can get the tax benefits immediately, instead of waiting until next year if you were to contribute the same amount on May 18 or later. Also note that today is the last day to withdraw any excess contributions to your IRAs if you didn't request a filing extension.
If they request a tax return filing extension, the deadline shifts to October These amounts are so high because you can make contributions as both an employee and an employer, although today's deadline only applies to the "employer contributions.
Only the employer can contribute to a SEP IRA, and whatever percentage of compensation employers set aside in the plan for themselves is the same percentage of pay they must contribute for each eligible employee. Contributions made to a Solo k as an employer are deductible business expenses. If you're self-employed, you must reduce this limit for contributions you make for your own account. If you contribute to your own SEP-IRA, you must make a special computation to figure your maximum deduction for the contributions.
If you have a health savings account HSA or Archer medical savings account MSA as part of your health insurance plan, today is the last day you can to contribute to the account for If so, it might make sense to put more money into the account for before the May 17 tax deadline expires if you haven't already reached the contribution limit.
That's especially true if you plan to make a contribution soon anyway.
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