Individuals and businesses who have been granted a tax deadline extension from the IRS to file their taxes are running out of time to meet the delayed deadline. The extra six months were best used to gather important supporting documents that would allow for the tax filing to be complete and accurate. If you have not gathered everything, this is your last chance to avoid a penalty.
Individuals must have their taxes filed by the October 15th extended deadline in order to benefit from the tax exemptions and credits that are available. That means you need to ensure you have gathered all income statements whether they were from bonuses, wages, interest, dividends, capital gains, rents or retirement.
In order to take advantage of certain credits and deductions, you should also gather documents regarding interest paid on loans, property taxes, heath insurance premiums and any donations to charity, either cash or property. If you care for an immediate family member in your home, have changed jobs, made energy efficient improvements to your home, had a new baby or bought a home, these are all special circumstances that present beneficial tax advantages, and so associated documents should also be gathered.
Partnerships and Subchapter-S Corporations
The extended due date for both partnerships and subchapter-S corporations is September 15. All income must be reported and should be reconciled to bank deposits for the year. All business expenses need to be summarized by type. Remember that meals and entertainment expenses are reported on a separate line and are only 50% deductible. Assets purchased for the year will need to be added to depreciation schedules. Also, any business assets disposed during the year will need to be removed and gains or losses calculated on the disposal.
New Businesses and Start Ups
If this is your first year filing taxes for your new business entity or start-up company, there are a lot of considerations that must be elected prior to filing in order to adhere to the September 15th extended tax deadline. The differences in the structure of the entity have countless tax implications. Deciding whether to file as a sole-proprietor, C-Corp or S-Corp impose additional restrictions and allowances that affect how much of your profits are taxed and whether you qualify for special credits and deductions. Finally, your accounting method and the manner in which your profits are taxed may determine how and when your business taxes are calculated- both now and in the future.
Self Employed Proprietors
If you operate your business as a sole proprietor-regardless of the entity type – your sales receipts, net profits, business expenses, car mileage are all deductible. If you operate your business from your home, your utility bills, mortgage or rent, telephone and other may also be deductible. The proper documentation is needed to substantiate all of these deductions.
In the case of multiple streams of income, the rules may apply in varying ways that may complicate the process of filing your tax return. Your documents need to be carefully organized in order to avoid making any mistakes. At Fricke CPA, we understand the intricate details of the tax code, and we have the resources to prepare your return well before the extended tax deadlines. Please do not hesitate to contact us at 770-216-2226 or through our website at www.frickecpa.com