Tax

June 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.

June 16

Individuals

If you are a U.S. citizen or resident alien living and working (or on military duty) outside the United States and Puerto Rico, file Form 1040 and pay any tax, interest, and penalties due. (U.S. citizens living in the U.S. should have paid their taxes on April 15.) If you want additional time to file your return, file Form 4868 to obtain 4 additional months to file. Then file Form 1040 by October 15. However, if you are a participant in a combat zone, you may be able to further extend the filing deadline.

Individuals

Make a payment of your 2014 estimated tax if you are not paying your income tax for the year through withholding (or will not pay enough tax that way). Use Form 1040-ES. This is the second installment date for estimated tax in 2014.

Corporations

Deposit the second installment of estimated income tax for 2014. 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 May.

Employers

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

• By Leon Clinton
• June 2, 2014

As the May 15 Filing Deadline for tax-exempt organizations filing Form 990-series information returns and notices quickly approaches, here are two important reminders for protecting personal information:

• First, make sure you file Form 990 if you are required to file. Filing the form is very important for many groups who are at risk of losing their tax exemption.
• Second, do not include Social Security numbers on Form 990 when you file the form. Including unnecessary personally identifiable information such as SSNs or other unrequested personal information could lead to identity theft.

In addition, here are seven tips to protect your exempt status and the information of your donors, clients, benefactors and administrators:

1. Certain organizations must file Form 990, Return of Organization Exempt From Income Tax. The annual form reports information about the mission, programs and finances of the filer. The due date for many groups to file their form is May 15.

2. Most groups must file a Form 990-series return or notice with the IRS. If they fail to file their annual report for three consecutive years, the law automatically revokes their federal tax exemption.

3. The law also requires that the IRS and most organizations make most parts of their filed forms available to the public. This includes schedules and attachments filed with the form.

4. Forms made available to the public include Forms 990, 990-EZ and 990-PF. All are marked “Open to Public Inspection” in the top right hand corner of the first page.

5. Generally, the IRS does not ask for SSNs on these forms. The forms’ instructions have a caution to filers not to include them on the form.

6. Don’t include personal information that’s not needed on Form 990. For example, including a person’s mailing address may put them at risk.

7. Organizations should e-file their tax forms. E-file lowers the risk of including SSNs or other unneeded personal information.

For more information on filing Form 990-series information returns and notices, please give us a call. We’re happy to answer any questions you have regarding charities and non-profit organizations.

• By Leon Clinton
• May 27, 2014

April 15 is the annual deadline for most people to file their federal income tax return and pay any taxes they owe. If, for whatever reason, you missed the deadline you may be assessed penalties for both failing to file a tax return and for failing to pay taxes they owe by the deadline. Here are eight important facts every taxpayer should know about penalties for filing or paying late:

1. A failure-to-file penalty may apply if you did not file by the tax filing deadline. A failure-to-pay penalty may apply if you did not pay all of the taxes you owe by the tax filing deadline.

2. The failure-to-file penalty is generally more than the failure-to-pay penalty. You should file your tax return on time each year, even if you’re not able to pay all the taxes you owe by the due date. You can reduce additional interest and penalties by paying as much as you can with your tax return. You should explore other payment options such as getting a loan or making an installment agreement to make payments. Contact us if you need help figuring out how to pay what you owe.

3. The penalty for filing late is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. That penalty starts accruing the day after the tax filing due date and will not exceed 25 percent of your unpaid taxes.

4. If you do not pay your taxes by the tax deadline, you normally will face a failure-to-pay penalty of 1/2 of 1 percent of your unpaid taxes. That penalty applies for each month or part of a month after the due date and starts accruing the day after the tax-filing due date.

5. If you timely requested an extension of time to file your individual income tax return and paid at least 90 percent of the taxes you owe with your request, you may not face a failure-to-pay penalty. However, you must pay any remaining balance by the extended due date.

6. If both the 5 percent failure-to-file penalty and the 1/2 percent failure-to-pay penalties apply in any month, the maximum penalty that you’ll pay for both is 5 percent.

7. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

8. You will not have to pay a late-filing or late-payment penalty if you can show reasonable cause for not filing or paying on time. Give us a call if you have any questions about what constitutes reasonable cause.

Special penalty relief may apply to taxpayers under certain conditions such as taxpayers affected by natural disasters. If you think this applies to you, don’t hesitate to contact us for additional information.

• By Leon Clinton
• May 20, 2014