Tax

April 10

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

April 15

Individuals – File an income tax return for 2014 (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 Return or 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 $1,900 or more in 2014 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 2013 or 2014 to household employees. Also report any income tax you withheld for your household employees.

Individuals – If you are not paying your 2015 income tax through withholding (or will not pay in enough tax during the year that way), pay the first installment of your 2015 estimated tax. Use Form 1040-ES.

Partnerships – File a 2014 calendar year return (Form 1065). Provide each partner with a copy of Schedule K-1 (Form 1065), Partner’s Share of Income, Credits, Deductions, etc., or a substitute Schedule K-1. If you want an automatic 5-month extension of time to file the return and provide Schedule K-1 or a substitute Schedule K-1, file Form 7004. Then file Form 1065 by September 15.

Electing Large Partnerships – File a 2014 calendar year return (Form 1065-B). If you want an automatic 6-month extension of time to file the return, file Form 7004. Then file Form 1065-B by October 15. March 16 was the due date for furnishing the Schedules K-1 to the partners.

Corporations – Deposit the first installment of estimated income tax for 2015. 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

Employees – Social Security, Medicare, and withheld income tax. File form 941 for the first quarter of 2015. 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 11 to file the return.

• By Leon Clinton
• April 3, 2015

Even if you’ve never paid Alternative Minimum Tax (AMT), before, you should not ignore this tax. Why? Because your tax situation might have changed and this might be the year that you need to pay AMT. AMT attempts to ensure that taxpayers who claim certain tax benefits pay a minimum amount of tax. You may have to pay this tax if your income is above a certain amount.

Here’s what you should know about the AMT:

1. When AMT applies. Your filing status and income determine the amount of your exemption. You may have to pay the AMT if your taxable income, plus certain adjustments, is more than your exemption amount. In most cases, if your income is below this amount, you will not owe AMT.

2. Exemption amounts. The 2014 AMT exemption amounts are:

• $52,800 if you are Single or Head of Household.
• $82,100 if you are Married Filing Joint or Qualifying Widow(er).
• $41,050 if you are Married Filing Separate.

Your AMT exemption is reduced if your income is more than certain limits.

3. Use the right forms. If you owe AMT, you usually must file Form 6251,Alternative Minimum Tax–Individuals. Some taxpayers who owe AMT can file Form 1040A and use the AMT Worksheet in the instructions.

4. AMT rules are complex. The easiest way to prepare and file your tax return is to use a qualified tax preparer who will figure out AMT for you if you owe the tax. Call today for more information or to set up a consultation.

• By Leon Clinton
• March 17, 2015

Since 1975, the Earned Income Tax Credit has helped workers with low and moderate incomes get a tax break each year. Four out of five eligible workers claim EITC. Wondering if you can too? Here’s what you should know about this valuable credit:

1. Review your eligibility. If you worked and earned under $52,427 in 2014, you may qualify for the EITC. If your financial or family situation has changed, you should review the EITC eligibility rules because you might qualify for the EITC this year even if you didn’t in the past. If you qualify for the EITC you must file a federal income tax return and claim the credit to get it. This is true even if you are not otherwise required to file a tax return.

2. Know the rules. Before you claim the EITC, you need to understand the rules to be sure you qualify. And it’s important that you get this right. Here are some factors you should consider:

• Your filing status can’t be Married Filing Separately.
• You must have a Social Security number that is valid for employment for yourself, your spouse if married, and any qualifying child listed on your tax return.
• You must have earned income. Earned income includes earnings from working for someone else or working for yourself.
• You may be married or single, with or without children to qualify. If you don’t have children, you must also meet age, residency and dependency rules. If you have a child who lived with you for more than six months of 2014, the child must meet age, residency, relationship and the joint return rules to qualify.
• If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply. Call the office to find out more.

3. Lower your tax or get a refund. The EITC reduces your federal tax and could result in a refund. If you qualify, the credit could be worth up to $6,143. The average credit was $2,407 last year.

4. Use a legitimate tax preparer. Don’t guess about your EITC eligibility. Use the EITC Assistant tool on IRS.gov, which helps you find out if you qualify and will estimate the amount of your EITC. Then, call the office.

Questions? Call today to find out more about this important tax credit.

• By Leon Clinton
• March 15, 2015