The business tax return deadline is quickly coming! Normally C- and S- corporation tax returns are due on March 15th, but this year that date is a Saturday so the kind folks at the IRS make the following Monday, March 17th the deadline instead.
At this point if you haven’t gotten your information to your CPA yet you are probably going to go on extension. This is done by filing IRS Form 7004. This gives you an extra 6 months- until September 15- to complete your tax return. For C-corporations if you owe any tax for the 2013 year this form allows you make a payment for the balance due.
If you are a non-profit entity with a December 31 tax year end you have a filing deadline on May 15! If you are not ready to complete your Form 990, Form 990-EZ, or 990-N e-postcard, make sure you file for your first extension with Form 8868.
OK folks- this is it. I think I found the funniest accountant ever. No really. He’s a CPA and a standup comedian. And he actually is pretty funny. So if you ever wanted to get your kicks off some tax jokes, I present Mr. Greg Kyte, CPA. Check out his skit on his website www.gregkyte.com. Also follow him on twitter @gregkyte.
If you make quarterly estimated payments, the fourth payment for 2012 is due today, January 15, 2013. If you need a voucher and instructions for filing estimated tax payments they can be downloaded from the IRS website here. Filing estimated tax payments helps you avoid those late payment penalties and interest that are calculated when you file your return.
With the economy as it is these days people might find themselves moving to find work. It is possible for these expenses to be tax deductible. Here is a guide as to how.
A Case of Two Tests
There are two tests that determine if your moving expenses are deductible- distance and time.
The distance test – your new work must be at least 50 miles father from your old home than your old job was from your old home; OR if you have no previous workplace or have been out of work or working part-time for a substantial amount of time your new job must be at least 50 miles from your old home.
The time test – Employees must work full-time for at least 39 weeks during the first 12 months immediately following your relocation. You do not need to work for the same employer for all 39 weeks and the weeks do not need to be in a row. Self-employed people must work full time at least 39 weeks during the first 12 months and a total of at least 78 weeks during the first 24 months immediate following your relocation.
You also need to make sure that your move is within 1 year from the date you first report to work for the new job. So if you move to a new area hoping to find work, hope you find it before 1 year passes!
Are We There Yet?
Haven’t met the time test by the time you need to file your return? You can still take the deduction for the tax year in which you moved if you think you will satisfy the time test during the following tax year. If you don’t take the moving deduction for the tax year in which you moved and meet the time test during the following tax year, you can go back an amend your tax return to take the deduction. You must take the deduction on the tax return of the same year in which you moved.
What if you take the deduction for the tax year in which you move but then don’t end up meeting the time test? You have two options. Either take the amount of the deduction as “other income” the following tax year or amend the tax return on which you claimed the deduction to remove it.
What Moving Expenses Can Be Deducted?
You can deduction the cost of moving your household goods and personal effects and travel including lodging. Some expenses might include:
Costs of connecting or disconnecting utilities.
Cost of shipping your car and pets.
Costs to store and insure your stuff within any period of 30 consecutive days after the day your things are moved from your former home and before they reach your new home.
There are many items that CANNOT be deducted, including the costs of meals while moving. You also CANNOT take a deduction for any expense that was reimbursed by your employer.
Moving expenses are deducted by filing Form 3903. You can find a copy of the form here. The deductible expenses are reported on Form 1040 (line 26 on 2011) and a copy of Form 3903 is filed with your return.
Have you ever gotten one of those ominous looking envelopes from the IRS? Even as a seasoned CPA when one of those IRS envelopes shows up at my front door I feel my pulse quicken. And if you don’t know what I am talking about, consider yourself lucky!
I have recently seen a shocking number of these “CP2000 notices,” indicating some kind of error that is resulting in you needing to make an additional payment. Sometimes it works out that you get an extra refund, but not often! What happens is this:
You submit your tax return to the IRS, the good tax-paying citizen that you are, usually in an electronic format.
The IRS takes the information you submit.
The IRS takes the information the payers submit. This includes W-2, 1099-MISC, 1099-INT, 1099-DIV, etc.
The IRS compares the two sets of information.
Something does not match properly and the CP2000 is sent to you.
This is where it is great to have a CPA that you work with because we are unphased by these letters. Often I find the IRS is wrong. Sometimes it is so wrong that it is clear that no human actually looked at the report before sticking it in the mail. Most times I can write a polite letter to the IRS and have the matter resolved quickly.
The lessons here? First- DON’T PANICK! Second- don’t ignore the IRS letter- give it to your CPA. Third- if you dont’ have a CPA, get one!
So in the midst of yet another tax extension busy season I made the decision (on the advice of the wise Denise Jacobs) to make a real effort to regularly blog about all sorts of accounting and tax related topics. Hopefully you find some interesting information here! If you have a specific question or have something to say about what I wrote I’d love to hear from you! So sharpen your pencil and get your abacus ready- here we go!