Recall that saying: “Time flies when you’re having fun.” I’m not sure if you can say preparing tax returns is fun, but time certainly seems to fly by during tax season as due dates approach. I thought we could take a moment and recap what’s left in the way of the deadlines and what you can do about them.
The Ides of March
For Julius Caesar, the Ides of March (March 15) was not a good day. If you own a corporation that owes taxes, it might not be a terrific day for you either. March 15 is the tax return due date for calendar year corporations. While you can extend the date you have to file the tax return to Sept. 17, any taxes you owe for 2011 are due and payable on March 15, 2012.
Is this the first year you have been in business? Did you want to switch the way your corporation or limited liability company is taxed? If so, March 15 will have a special meaning for you too.
If you formed your corporation last year, and did not elect to be treated as an S Corporation but want to now, you must file a Form 2553 with the Internal Revenue Service no later than 2 months and 15 days after the beginning of the tax year during which you want the election to take effect. For calendar year corporations, this is March 15. If you formed your corporation in 2012, the actual due date will be later, if the corporation was formed after Jan. 1.
The choice to be taxed as an S Corporation can have significant effects on your overall tax picture, so if you and your tax advisor have determined you should be taxed as one, don’t miss this deadline.
One of the most effective tax planning tools taxpayers have at their disposal today is the ability to elect how their company will be taxed. The Limited Liability Company is an entity that provides a great deal of flexibility. On one hand, the LLC is not a corporation and is not assessed the corporate franchise tax. On the other hand, you can make an election to allow your LLC to be taxed as a corporation and then elect to treat it as an S Corporation. Taking such steps can be very beneficial from a tax standpoint, but the elections need to be made by March 15 for a calendar year corporation.
If you have ever filed an individual tax return, you’re no doubt aware that it is generally due April 15 of each year. The 2012 due date is April 17 because of a holiday in Washington, D.C. While you can get an automatic extension to file your return as late as Oct. 15, any tax due must be paid by April 17 in order to avoid late payment penalties.
If you intend to fund your IRA for 2011 in 2012, be aware that you must fund the IRA by April 17, 2012. Likewise, if you have not funded your Health Savings Account (HSA), you have until April 17, 2012, to make the payment and deduct it on your 2011 return.
Trusts and partnership returns are due on the same day as individual returns. Take note, you can only extend the filing deadline to Sept. 17, 2012. Penalties for failing to file these returns on time can be stiff.
Other Important Dates
If you want a job that forces you to live around a calendar, go into the payroll compliance business. Generally speaking, any company with more than a few employees will find it necessary to pay withholding and payroll taxes at least monthly. Payroll tax filings will generally be due quarterly. There are also a myriad of other filing deadlines for excise and other taxes.
Remember when mom and dad constantly reminded you how much they loved your letters when you were away at school. Remember when keeping up your end of the periodic correspondence routine greatly eased conversations with them on those occasions when you needed to borrow a few dollars? Staying in touch on a timely basis does much the same thing for Uncle Sam. The difference is that when he doesn’t hear from you, he sends a bill to you for hurting his feelings. Paying for those hurt feelings can get very expensive.
If you have a looming tax deadline that we can help you with, give us a call. If you are uncertain about your filing requirements, give us a call. We are here to help you keep your favorite Uncle happy. Until April, beware the Ides of March.