It is officially tax time again, ready, or not.
Many business owners choose to outsource their bookkeeping and accounting needs, but even those who do not, typically agree that it pays to have a tax professional prepare their tax return.
Having accurate and clean accounting data makes things easier for your tax professional, which will likely translate to a faster filing turnaround and lower costs.
Here are the dates you (might) need to know in 2020 to officially “close the book”(s) on 2019, along with some Pro Tips to guide you along the way.
January 15, 2020
If you need to make your last estimated tax payment for 2019 your payment is due on 1/15. You may instead choose to file your full 2019 tax return and pay any taxes due by January 31st instead of paying a 4th quarter estimate.
Pro Tip
Now is the time to determine if you should make estimated tax payments in 2020. According to the IRS sole proprietors, partners, and S corporation shareholders generally have to make estimated tax payments if they expect to owe $1,000 or more in taxes when their return is filed. C-Corporations generally need to make estimated tax payments if they expect to owe $500 or more. Be sure to discuss this with your CPA or tax professional.
January 31, 2020
1099’s and W-2s are due. If you have employees, the deadline to send out a Form W-2 to your employees, and to file the documents with the IRS is 1/31.
This is also the deadline to issue a Form 1099-MISC to all independent contractors who received $600 or more from your business in 2019.
You may also be required to provide a Form 1099, or another information return, for certain payments you made during 2019. These forms are due by February 18th. Consult the IRS or your tax professional for more details.
February 28, 2020 (even though it is a leap year)
Assuming you do issue any 1099s, you need to file information returns with the IRS to report them. The deadline for all businesses to file information returns is 2/28, unless you file your 1099s electronically. For e-file, the deadline to report them to the IRS is March 31st.
March 16, 2020 (3/15, the normal due date, falls on a Sunday)
This is the tax return deadline for S-Corps (using Form 1120-S) and for Partnerships (using Form 1065). Schedule K-1s are due to each shareholder/partner on this date as well. Even if you plan to file for a 6-month extension on filing either return, your tax liability (albeit an estimate) is still due on March 16th.
April 15, 2020
This is the due date for Corporation tax returns (using Form 1120) and sole proprietors (using a Schedule C, also known as Form 1040.)
Pro Tip
A single member LLC is a “disregarded entity” for tax purposes, according to the IRS. Therefore, it is taxed the same as a sole proprietorship, with tax returns also due on April 15th.
September 15, 2020
If you “timely requested” and received a 6-month extension to file a tax return for an S-Corp or a Partnership, the return is due on 9/15.
October 15, 2020
If you “timely requested” and received a 6-month extension to file a Corporate tax return, your tax return is due on 10/15.
You can see the full 2020 IRS Tax Calendar here.
If you chose not to hire an outsourced bookkeeping professional in 2019, and you still want to file your 2019 taxes without filing for an extension, there’s still time, but you need to act now. Your tax professionals are about to get busy and may need to file an extension for you anyway.
Pro Tips to Save Time and Money Before Visiting Your CPA
- Run a few reports and look for any obvious anomalies. Big errors are typically pretty simple to catch, although figuring out how or why the error occurred may be another story altogether.
- If you have not been doing it monthly, reconcile all bank, credit card and liability accounts. Reconciliations help confirm the accuracy of your accounting data and provide an opportunity for spotting fraud.
- Review your inventory and determine the value of items not sold. Let your tax professional know about this as part of your review.
- Verify that all necessary journal entries have been made. These may include entries for depreciation, payroll tax liabilities, or prepaid expenses (rent, insurance, legal retainers, etc.)
- Send payroll forms (to employees) and federal filings, including W-2s, W-3s, 940s, 941s, and 944s, and any 1099s by the deadlines above.
If this list seems overwhelming, or you know that your time is better spent in front of your customers than it is on bookkeeping, let us know.
We can help you reduce that tax time angst.
Don’t Delay! Call Today!