Author: Leon Clinton

Tax

Tax Due Dates for February 2013

February 11 Employers – Federal unemployment tax. File Form 940 for 2012. This due date applies only if you deposited the tax for the year in full and on time.Employers – Social Security, Medicare, and withheld income tax. File Form 941 for the fourth quarter of 2012. This due date applies only if you deposited the tax for the quarter in full and on time.

Small Employers – File Form 944 to report Social Security and Medicare taxes and withheld income tax for 2012. This due date applies only if you deposited the tax for the year in full and on time.

Farm Employers – File Form 943 to report Social Security and Medicare taxes and withheld income tax for 2012. This due date applies only if you deposited the tax for the year in full and on time.

Certain Small Employers – File Form 944 to report Social Security and Medicare taxes and withheld income tax for 2012. This tax due date applies only if you deposited the tax for the year in full and on time.

Employers – Nonpayroll taxes. File Form 945 to report income tax withheld for 2012 on all nonpayroll items. This due date applies only if you deposited the tax for the year in full and on time.

Employees – who work for tips. If you received $20 or more in tips during January, report them to your employer. You can use Form 4070.
February 15 Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in January.Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in January.

Individuals – If you claimed exemption from income tax withholding last year on the Form W-4 you gave your employer, you must file a new Form W-4 by this date to continue your exemption for another year.
February 16 Employers – Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2012, but did not give you a new Form W-4 to continue the exemption this year.
February 28 Businesses – File information returns (Form 1099) for certain payments you made during 2012. There are different forms for different types of payments. Use a separate Form 1096 to summarize and transmit the forms for each type of payment. See the 2012 Instructions for Forms 1099, 1098, 5498, and W-2G for information on what payments are covered, how much the payment must be before a return is required, what form to use, and extensions of time to file.If you file Forms 1098, 1099, or W-2G electronically (not by magnetic media), your due date for filing them with the IRS will be extended to April 1. The due date for giving the recipient these forms is still January 31.

Payers of Gambling Winnings – File Form 1096, Annual Summary and transmittal of U.S. Information Returns, along with Copy A of all the Forms W-2G you issued for 2012. If you file Forms W-2G electronically (not by magnetic tape), your due date for filing them with the IRS will be extended to April 1. The due date for giving the recipient these forms remains January 31.

Employers – File Form W-3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W-2 you issued for 2012.

If you file Forms W-2 electronically (not by magnetic media), your due date for filing them with the SSA will be extended to April 1. The due date for giving the recipient these forms is still January 31.

Employers – with employees who work for tips. File Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips. Use Form 8027-T, Transmittal of Employer’s Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically (not by magnetic tape), your due date for filing them with the IRS will be extended to April 1.
March 1 Farmers and fishermen – File your 2012 income tax return and pay any tax due. However, you have until April 15 to file if you paid your 2012 estimated tax by January 15, 2013. (See Penalty Relief for Farmers and Fishermen in Tax Tips section above)
Tax

Don’t Fall for Phony IRS Websites

The Internal Revenue Service is issuing a warning about a new tax scam that uses a website that mimics the IRS e-Services online registration page.

The actual IRS e-Services page offers web-based products for tax preparers, not the general public. The phony web page looks almost identical to the real one. The IRS gets many reports of fake websites like this. Criminals use these sites to lure people into providing personal and financial information that may be used to steal the victim’s money or identity.

The address of the official IRS website is www.irs.gov. Don’t be misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov.

If you find a suspicious website that claims to be the IRS, send the site’s URL by email to phishing@irs.gov. Use the subject line, ‘Suspicious website’.

Be aware that the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

If you have any questions, don’t hesitate to contact us and be sure to report any unsolicited email that appears to be from the IRS by sending it to phishing@irs.gov.

Retirement Tax

Retirement Plan Distributions for Sandy Victims

The Internal Revenue Service announced that 401(k)s and similar employer-sponsored retirement plans can be used to make loans and hardship distributions to victims of Hurricane Sandy and members of their families.

401(k) plan participants, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, and state and local government employees with 457(b) deferred-compensation plans may be eligible to take advantage of these streamlined loan procedures and liberalized hardship distribution rules. Though IRA participants are barred from taking out loans, they may be eligible to receive distributions under liberalized procedures.

Retirement plans can provide this relief to employees and certain members of their families who live or work in the disaster area. To qualify for this relief, hardship withdrawals must be made by Feb. 1, 2013.

The IRS is also relaxing procedural and administrative rules that normally apply to retirement plan loans and hardship distributions. As a result, eligible retirement plan participants will be able to access their money more quickly with a minimum of red tape. In addition, the six-month ban on 401(k) and 403(b) contributions that normally affects employees who take hardship distributions will not apply.

This broad-based relief means that a retirement plan can allow a Sandy victim to take a hardship distribution or borrow up to the specified statutory limits from the victim’s retirement plan. It also means that a person who lives outside the disaster area can take out a retirement plan loan or hardship distribution and use it to assist a son, daughter, parent, grandparent or other dependent who lived or worked in the disaster area.

Plans will be allowed to make loans or hardship distributions before the plan is formally amended to provide for such features. In addition, the plan can ignore the limits that normally apply to hardship distributions, thus allowing them, for example, to be used for food and shelter. If a plan requires certain documentation before a distribution is made, the plan can relax this requirement as described in the Announcement.

Ordinarily, retirement plan loan proceeds are tax-free if they are repaid over a period of five years or less. Under current law, hardship distributions are generally taxable. Also, a 10 percent early-withdrawal tax usually applies.

If you have any questions about hardship distributions from your retirement account, please give us a call. We can help.

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