Weekends & Holidays:
If a due date falls on a Saturday, Sunday or holiday, the due date is automatically extended until the next business day that is not itself a legal holiday.

September

1 - 2012 Fall and 2013 Tax Planning

Contact this office to schedule a consultation appointment.

10 - Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during August, you are required to report them to your employer on IRS Form 4070 no later than September 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

17 - Estimated Tax Payment Due

The third installment of 2012 individual estimated taxes is due. Our tax system is a "pay-as-you-go" system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the "pay-as-you-go" requirement. These include:

• Payroll withholding for employers;
• Pension withholding for retirees; and
• Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding.

When a taxpayer fails to prepay a safe harbor (minimum) amount, they can be subject to the underpayment penalty. This penalty is equal to the federal short-term rate plus 3 percentage points, and the penalty is computed on a quarter-by-quarter basis.

Federal tax law does provide ways to avoid the underpayment penalty. If the underpayment is less than the $1,000 de-minimis amount, no penalty is assessed. In addition, the law provides "safe harbor" prepayments. There are two safe harbors:

• The first safe harbor is based on the tax owed in the current year. If your payments equal or exceed 90% of what is owed in the current year, you can escape a penalty.
• The second safe harbor is based on the tax owed in the immediately preceding tax year. This safe harbor is generally 100% of the prior year's tax liability. However, for higher-income taxpayers whose AGI exceeds $150,000 ($75,000 for married taxpayers filing separately), the prior year's safe harbor is 110%.

Example: Suppose your tax for the year is $10,000 and your prepayments total $5,600. The result is that you owe an additional $4,400 on your tax return. To find out if you owe a penalty, see if you meet the first safe harbor exception. Since 90% of $10,000 is $9,000, your prepayments fell short of the mark. You can't avoid the penalty under this exception.

However, in the above example, the safe harbor may still apply. Assume your prior year's tax was $5,000. Since you prepaid $5,600, which is greater than the 110% of the prior year's tax (110% = $5,500), you qualify for this safe harbor and can escape the penalty.

This example underscores the importance of making sure your prepayments are adequate, especially if you have a large increase in income. This is common when there is a large gain from the sale of stocks, sale of property, when large bonuses are paid, when a taxpayer retires, etc. Timely payment of each required estimated tax installment is also a requirement to meet the safe harbor exception to the penalty. If you have questions regarding your safe harbor estimates, please call this office as soon as possible.

CAUTION: Some state de-minimis amounts and safe harbor estimate rules are different than those for the Federal estimates. Please call this office for particular state safe harbor rules.

17 - Corporations

File a 2011 calendar year income tax return (Form 1120 or 1120-A) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic 6-month extension.

17 - S Corporations

File a 2011 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you requested an automatic 6-month extension.

17 - Corporations

Deposit the third installment of estimated income tax for 2012 for calendar year corporations.

17 - Social Security, Medicare and withheld income tax

If the monthly deposit rule applies, deposit the tax for payments in August.

17 - Nonpayroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in August.

17 - Partnerships

File a 2011 calendar year return (Form 1065). This due date applies only if you were given an additional 5-month extension. Provide each partner with a copy of K-1 (Form 1065) or a substitute Schedule K-1.

17 - Fiduciaries of Estates and Trusts

File a 2011 calendar year return (Form 1041). This due date applies only if you were given an additional 5-month extension. If applicable, provide each beneficiary with a copy of K-1 (Form 1041) or a substitute Schedule K-1.

October

10 - Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during September, you are required to report them to your employer on IRS Form 4070 no later than October 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

15 - Individuals

If you have an automatic 6-month extension to file your income tax return for 2011 file Form 1040, 1040A, or 1040EZ and pay any tax, interest, and penalties due.

15 - SEP IRA & Keogh Contributions

Last day to contribute to SEP or Keogh retirement plan for calendar year 2011 if tax return is on extension through October 15.

15 - Electing Large Partnerships

File a 2011 calendar year return (Form 1065-B). This due date applies only if you were given an additional 6-month extension. March 17 was the due date for furnishing Schedules K-1 or substitute Schedule K-1 to the partners.

15 - Social Security, Medicare and withheld income tax

If the monthly deposit rule applies, deposit the tax for payments in September.

15 - Nonpayroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in September.

31 - Social Security, Medicare and Withheld Income Tax

File Form 941 for the third quarter of 2012. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until November 13 to file the return.

31 - Certain Small Employers

Deposit any undeposited tax if your tax liability is $2,500 or more for 2011 2012 but less than $2,500 for the third quarter.

31 - Federal Unemployment Tax

Deposit the tax owed through September if more than $500.

November

13 - Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during October, you are required to report them to your employer on IRS Form 4070 no later than November 13. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

13 - Social Security, Medicare and Withheld Income Tax

File Form 941 for the third quarter of 2012. This due date applies only if you deposited the tax for the quarter in full and on time.

15 - Social Security, Medicare and Withheld Income Tax

If the monthly deposit rule applies, deposit the tax for payments in October.

15 - Nonpayroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in October.

December

1 - Time for Year-End Tax Planning

December is the month to take final actions that can affect your tax result for 2012. Taxpayers with substantial increases or decreases in income, changes in marital status or dependent status, and those who sold property during 2012 should call for a tax planning consultation appointment.

10 - Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during November, you are required to report them to your employer on IRS Form 4070 no later than December 12. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

17 - Social Security, Medicare and Withheld Income Tax

If the monthly deposit rule applies, deposit the tax for payments in November.

17 - Nonpayroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in November.

17 - Corporations

The fourth installment of estimated tax for 2012 calendar year corporations is due.

31 - Last Day to Make Mandatory IRA Withdrawals

Last day to withdraw funds from a Traditional IRA Account and avoid a penalty if you turned age 70½ before 2012. If the institution holding your IRA will not be open on December 31, you will need to arrange for withdrawal before that date.
31 - Last Day to Pay Deductible Expenses for 2012
Last day to pay deductible expenses for the 2012 return (doesn't apply to IRA, SEP or Keogh contributions, all of which can be made after December 31, 2012). Taxpayers who are making state estimated payments may find it advantageous to prepay the January state estimated tax payment in December (Please call the office for more information).

31 - Last Day to Set Up a Keogh Account for 2012

If you are self-employed, December 31 is the last day to set up a Keogh Retirement Account if you plan to make a 2012 Contribution. If the institution where you plan to set up the account will not be open for business on the 31st, you will need to establish the plan before the 31st. Note: there are other options such as SEP plans that can be set up after the close of the year. Please call the office to discuss your options.

31 - Caution! Last Day of the Year

If the actions you wish to take cannot be completed on the 31st or a single day, you should consider taking action earlier than December 31st.