Tax

April 2

Electronic filing of Forms 1097, 1098, 1099, 3921, and 3922 – File Forms 1097, 1098, 1099, 3921, and 3922 with the IRS (except a Form 1099-MISC reporting nonemployee compensation). This due date applies only if you file electronically. Otherwise, see February 28. The due date for giving the recipient these forms generally remains January 31.

Electronic Filing of Form W-2G– File copies of all the Form W-2G (Certain Gambling Winnings) you issued for 2017. This due date applies only if you electronically file. Otherwise, see February 28. The due date for giving the recipient these forms remains January 31.

Electronic Filing of Forms 8027 – File copies of all the Forms 8027 you issued for 2017. This due date applies only if you electronically file. Otherwise, see February 28.

Electronic Filing of Forms 1094-C and 1095-C and Forms 1094-B and 1094-B – If you’re an applicable Large Employer, file electronic forms 1094-C and 1095-C with the IRS. For all other providers of essential minimum coverage, file electronic Forms 1094-B and 1095-B with the IRS. Otherwise, see February 28.

April 10

Employees who work for tips – If you received $20 or more in tips during March, report them to your employer. You can use Form 4070.

April 17

Individuals – File an income tax return for 2017 (Form 1040, 1040A, or 1040EZ) and pay any tax due. If you want an automatic 6-month extension of time to file the return, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Returnor you can get an extension by phone if you pay part or all of your estimate of income tax due with a credit card. Then file Form 1040, 1040A, or 1040EZ by October 15.

Household Employers – If you paid cash wages of $2,000 or more in 2017 to a household employee, file Schedule H (Form 1040) with your income tax return and report any employment taxes. Report any federal unemployment (FUTA) tax on Schedule H if you paid total cash wages of $1,000 or more in any calendar quarter of 2016 or 2017 to household employees. Also, report any income tax you withheld for your household employees.

Individuals – If you are not paying your 2018 income tax through withholding (or will not pay in enough tax during the year that way), pay the first installment of your 2018 estimated tax. Use Form 1040-ES.

Corporations – File a 2017 calendar year income tax return (Form 1120) and pay any tax due. If you want an automatic 6-month extension of time to file the return, file Form 7004 and deposit what you estimate you owe in taxes.

Corporations – Deposit the first installment of estimated income tax for 2018. A worksheet, Form 1120-W, is available to help you estimate your tax for the year.

Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in March.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in March.

April 30

Employers – Social Security, Medicare, and withheld income tax. File form 941 for the first quarter of 2018. Deposit any undeposited tax. (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 May 10 to file the return.

• By Leon Clinton
• April 2, 2018

Taxpayers whose incomes dropped in 2017 due to last year’s hurricanes–especially those who lived in areas affected by Hurricanes Harvey, Irma and Maria–may be eligible for the Earned Income Tax Credit (EITC). The EITC is a credit for low and moderate income workers and families. Here’s how it works:

If you lived in one of the federally declared hurricane disaster areas during 2017, you may be able to use a special computation method that enables you to claim the EITC or claim a larger than usual credit. This special method is only available to people who lived in a hurricane disaster area.

Under this method, taxpayers whose incomes dropped in 2017 can choose to figure the credit using their 2016 earned income rather than their 2017 earned income. Eligible taxpayers should figure the credit both ways to see which yields the larger EITC.

About the EITC

The EITC helps working people who earned $53,930 or less for 2017 (adjusted annually for inflation). To claim the credit taxpayers must also meet other eligibility requirements.

The maximum refund is $6,318 refund for working families with qualifying children; however, actual credit amounts vary based on income, family size, and other factors. Workers without a qualifying child with incomes below $20,600 could also be eligible for a smaller credit of up to $510.

Because it is a refundable credit, those who qualify and claim it could pay less federal tax, pay no tax or may even get a refund. On average, EITC adds $2,445 to refunds. To take the credit, people must file a tax return, even if they owe no tax and even if they normally aren’t required to file.

To qualify for the EITC, an eligible taxpayer must meet basic rules and have earned income from working for someone, being self-employed or running a business or farm. This includes home-based businesses, the sharing economy, and employment in the service, construction and agriculture industries. In addition, certain disability payments may qualify as earned income for EITC purposes.

Reminder: By law the IRS cannot issue refunds before mid-February for tax returns that claim the EITC or the Additional Child Tax Credit (ACTC). The IRS must hold the entire refund–even the portion not associated with EITC or ACTC. This change helps ensure taxpayers receive the refund they deserve and gives the agency more time to detect and prevent errors and fraud.February 27, 2018, is the earliest EITC/ACTC related refunds arrive in taxpayer bank accounts or debit cards–if they chose direct deposit and there are no issues with the tax return.

For more information about the EITC and other refundable credits, don’t hesitate to call.

• By Leon Clinton
• March 28, 2018

With the 2018 tax filing season in full swing, it’s not too early to think about how the health care law affects your taxes. The Affordable Care Act requires you and each member of your family to do at least one of the following:

• Have qualifying health coverage called minimum essential coverage
• Qualify for a health coverage exemption
• Make a shared responsibility payment with your federal income tax return for the months that you did not have coverage or an exemption

If you meet certain criteria for the tax year, you may be exempt from the requirement to have minimum essential coverage. You will not have to make a shared responsibility payment for any month that you are exempt. Instead, you’ll file Form 8965, Health Coverage Exemptions, with your federal income tax return. For any month that you do not qualify for a coverage exemption, you will need to have minimum essential coverage or make a shared responsibility payment. You may be exempt if you meet one of the following:

• The lowest-cost coverage available to you is considered unaffordable
• You have a gap in coverage that is less than three (3) consecutive months
• You qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage or belonging to a group specifically exempt from the coverage requirement

The Federally-facilitated Marketplace is no longer granting exemptions for members of a health care sharing ministry, members of Indian Tribes, and incarceration. Eligible individuals can still claim these exemptions on a tax return. For a full list of exemptions and how to claim them, please call.

Federal tax returns that do not reflect at least one of these options–reporting health care coverage, claiming a coverage exemption or reporting a shared responsibility payment–will be rejected if the return is filed electronically. If filed on paper, tax returns that do not reflect at least one of these options will take longer to process and any refunds will be delayed. You should respond promptly to IRS correspondence about your health care coverage.

Questions?

To find out if you’re eligible for a coverage exemption or must make a payment, don’t hesitate to contact the office.

• By Leon Clinton
• March 25, 2018