Sunshine Tax: Taxes for Small Business in Florida

Florida is among the most tax-friendly states in America. If you have a small or midsize business in the state of Florida, you may be shielded from many typical forms of small business taxesBut how can you know which tax laws apply to your business? This post will cover some of the more common tax questions related to taxes for small businesses in Florida.

What Types of Tax Liabilities Are There for Florida Small Businesses?

Florida business owners should be aware of the following:

  • Corporations that do business in Florida must pay a 5.5% income tax
  • Florida has a sales tax rate of 6%
  • S Corporations are exempt from paying state income tax
  • Sole proprietorships, partnerships, and most LLCs are exempt from state income tax
  • Florida residents do not pay a state income tax
  • Business owners should expect to pay federal income tax on business earnings
  • Business conducted in other states may be subject to additional state laws

Because so many businesses are exempt from Florida state income tax, many small business owners can benefit from having their business shielded from traditional tax liabilities.  Below, we’ll go into greater detail regarding the rules for taxes for different types of business entities in the state of Florida.  

What Kinds of Taxes Can an S Corporation Expect to Pay in Florida?

In Florida, S Corporations are not treated as traditional corporations when it comes to taxes. Thus, S Corporations do not pay the state’s 5.5% corporate tax. S Corporations are also exempt from federal income tax.

How is this possible? With an S Corporation, the income earned by the business goes directly to the business owners. The owners are then expected to pay federal income tax based on the income they receive from their company. However, this income is not subject to Florida state tax.

A man and a sketch out a project for their LLC business

Photo by cottonbro from Pexels

How Are Small Business LLCs Taxed in Florida?

An LLC can be classified in one of two ways. Typically, LLCs are designated to be partnerships or disregarded entities. However, in this case, the LLC does not pay Florida income tax simply because it is not classified as a corporation.

However, some LLCs can be classified as incorporated. If they are classified as an incorporated business, the LLC must pay the standard 5.5% Florida state income tax—or at least the 3.3% alternative minimum tax. LLCs classified as corporations will file Form F-1065 if one or more of its owners is a corporation.

The actual business owner does not have to pay tax to the state of Florida for the income they personally receive from the business, except in those cases in which the LLC is incorporated.

How Are Small Business Partnerships in Florida Taxed?

Business partnerships can be classified as general partnerships, limited partnerships (LPs), and limited liability partnerships (LLPs). Regardless of these specific designations, none of these partnerships are required to pay state income tax in Florida.

However, the partners of these businesses are required to pay federal income tax on the money they receive from these businesses, based on standard income tax rates. But because Florida does not tax ordinary income, business owners of partnerships are not required to pay Florida state income tax.

A Florida business owner sits at a table with a pile of tax papers.

Photo by Tima Miroshnichenko from Pexels

What Tax Obligations Are There for Sole Proprietorships in Florida?

Florida treats a sole proprietorship like a partnership. The only difference is that the state looks at the distributed income to one proprietor instead of many partners. Thus, like partnerships, sole proprietorships are shielded from traditional state income tax.

This also means that the proprietor is expected to pay tax on any business income he or she receives, though only to the federal government. Since it is considered to be personal income, the individual does not pay state income taxes.

What If You Have a Multi-State Business? How Are You Taxed?

For most organizations, there are no required taxes for small businesses in Florida. However, if you own a business in Florida but earn money from another state, you are considered to have a nexus in those states. Therefore, in these situations, your business may be subject to the tax laws in those states.

Because different states have different state tax laws, this can be confusing. If you earn money in multiple states, it may be prudent to review nexus rules to see how they may impact your business. 

Let Xendoo Help You

Looking for Florida bookkeeping services? Xendoo can help. We understand the rules regarding taxes for small businesses in Florida and help you keep your books up-to-date. We can even help with Florida tax preparation. When you have questions, contact the experts at Xendoo.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Eight Tax Tips for Restaurant Owners

Editor’s Note: This post was originally published in February 2017 and has been revamped and updated for accuracy and comprehensiveness. 

You know that filing taxes can be stressful even in the best of times, but as a restaurant owner, tax time can leave you feeling in the weeds because your deductions are exponentially more complex. Never fear, though, because Xendoo is here to help. If you aren’t yet taking advantage of our full suite of professional business accounting services, here are a few quick restaurant tax tips for filing returns that can help save you some headache and money.

1. Document, Document, Document!

Did we mention that you need to document everything?  One of the best restaurant tax tips is to document and keep every invoice, every check stub, and every e-mail, no matter how inconsequential you might think it is at the time. You just never know when you might need to produce that little receipt during an audit, and running across a receipt might even remind you of something that you almost forgot to deduct. Set up a sound filing system where you can locate any tax documents you might need by vendor or category and keep it up to date.

2. Deduct All Food and Beverage Expenses

Since food cost is almost certainly your largest expense category (with the possible exception of labor), you should be deducting the cost of everything on your menu as an ordinary and necessary cost of doing business. But it’s not just the actual ingredients that you can write off. You can also deduct the cost of preparation materials like fryer oil and condiments, as well as any food that you have to throw out because it’s expired or spoiled. This is one restaurant tax tip that can take the sting out of tossing out old produce.

3. Deduct All Employee Compensation

Payroll is your other big expense category, and it’s deductible as an ordinary and necessary expense because obviously, your business can’t operate without staff. But, again, it’s not just the weekly payroll that you get to deduct. You can also deduct the cost of any employee discounts on meals, paid vacation or sick days, and any dental, vision, health, life, or other types of insurance you might provide for your team members. However, business owners don’t generally get to count salaries or benefits to themselves as deductions because doing so would essentially make any profits from the business tax exempt.

4. Deduct Mileage and Business Travel

Do you or any of your employees drive a personal vehicle as part of the business? Are you maybe making deliveries or picking up supplies? What about to or from training events? If you have any sort of driving directly related to your business, you can deduct that at the current standard mileage rate. But be careful—this is an often-abused deduction, so your documentation of it needs to be meticulously maintained. Driving to and from work doesn’t count as a business expense. Use either a separate ledger or a smartphone app that’s designed to track mileage. Also, if you have overnight travel for training, food shows, conferences, or other business-related events, you can deduct hotel and food expenses, as well.

5. Deduct Large Equipment Purchases

Under a 2016 change to the tax code, you can now deduct the total cost of certain equipment purchases up to $500,000 for the year of purchase instead of depreciating equipment over time in the traditional manner. Known as the ‘Section 179 deduction,’ this change is meant to ease the cash flow for small businesses. It covers a wide array of equipment such as computers, office furniture, vehicles, and machinery. That means the new walk-in cooler you just bought because the old one finally bit the dust can start working for you right away.

 

A server pours coffee into mugs.

Photo by Tyler Nix on Unsplash

6. Take Advantage of the Work Opportunity Tax Credit

Many business owners aren’t aware that the tax code rewards employers for hiring people from certain groups that have historically had difficulty finding employment. Known as the Work Opportunity Tax Credit (WOTC), these groups might include military veterans, summer youth employees, long-term unemployment recipients, rehabilitated felons, residents of designated Empowerment Zones, and many others. This restaurant tax tip is an excellent way to save your business some money while contributing to the community through socially responsible hiring practices.

7. Make Use of Enhanced Charitable Deductions

With a handful of exceptions, the IRS allows businesses to deduct donations to §501(c)(3) nonprofit organizations just like individuals do, including some enhanced deductions specifically for restaurants donating food. Take advantage of these types of restaurant tax tips can be a little tricky, though, so you probably want to hire a small business accounting firm like Xendoo to help navigate these waters safely. You can’t deduct staff time or the total fair market value of the food, but these deductions can still help boost your profit margin significantly.

8. Track Employee Tips Meticulously

Reporting credit card tips is pretty easy since they are tracked through the POS system, but cash tips can get messy. It’s the responsibility of servers to report their tips accurately, but if they don’t report cash tips, the IRS will assume an 8% tip rule. In cash sale situations, the business owner’s responsibility is to withhold 8% of the employee’s cash sales as an assumed tip, and liability for failure to do so could land on the employer. It’s a good idea to go over these rules with your team because you also have to file a Form 8027 each year, and the IRS expects to see accurate records, so it’s in everyone’s interest to pay attention to this one.

 

These restaurant tax tips are a good start for any business owner, but bookkeeping for restaurants isn’t for the faint of heart, which is why Xendoo is ready to help with our affordable bookkeeping and accounting services. Instead, it would be best if you spent your time growing your business and let our team of experts lift the tax burden and do what they do best.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Two business woman smile discuss accounting at a desk

Why You Should Hire an Experienced Florida Accountant

As a small business owner, you want to keep your head in the game. After all, you started your business because you’re passionate about the work you do, and you want to connect your products and services to customers.

So why are you trying to juggle your own books?

We understand the pressures that small business owners are experiencing. Handling your own bookkeeping and accounting may seem like an easy corner to cut, but the chances are that you’ll pay for it in one way or another. 

You simply might not be able to give your books the time and attention you need—a problem that can snowball out of control and leave you with a disaster once tax season approaches. There are many online accounting services available. You can’t discount the value and simplicity that these services can offer, but how can you be confident that these services will understand your local business or Florida state law? Unfortunately, accounting software is similarly generic and can only take you so far in navigating the needs of local Florida businesses.

An experienced Florida accountant can help you with more than just the books. So let’s explore the various benefits of hiring a Florida accountant for your business.

A Florida Accountant Can Help with the Legal Structure of Your Business

On paper, businesses are largely defined by their legal structure. A business can be a limited liability company (LLC), a partnership or corporation, or a sole proprietorship. These structures are based on characteristics such as:

  • Liability
  • Taxation
  • Fees and forms
  • Investment needs and opportunities
  • Maintaining operations

When you set up your business, how will you consider these factors? This is where an experienced Florida accountant can really be helpful. Choosing an accountant can help your business to navigate these questions and ensure that your business is optimized according to Florida business law.

A Florida Accountant Can Keep Your Books and Records Up-to-Date and Accurate

Perhaps the most obvious benefit of working with a Florida accountant is that they can keep an eye on your books. Ideally, an experienced accountant will monitor your books all year long (or at least at regular intervals), which is vital when it comes to tax planning.

A Florida Certified Public Accountant Can Help You to Understand Sales Tax Laws

Tax laws are notoriously complicated. Sales tax laws in Florida are no exception. Unless you have a degree in accounting, you could quickly start tearing your hair out trying to stay above board. And if you slip up, your business could face stiff penalties for violating tax laws or failing to meet deadlines for your tax returns. This doesn’t just affect you — it will also affect your staff and your loyal customers.

What about an eCommerce business? Organizations that work with out-of-state customers create a business connection called a “nexus” that requires them to pay sales taxes. An experienced accountant can help you to navigate these twenty-first-century questions and spare you the penalties that might come your way for improper financial reporting. 

This is where Xendoo can be especially helpful. Our online financial experts provide tax services to a variety of businesses, but our real advantage is our understanding of the Florida economic landscape. 

Businesses looking for bookkeeping in Naples or bookkeeping in Gainesville, for example, can take advantage of our financial expertise and local knowledge.

A Florida Accountant Can Help to Expand Your Business

Are you looking to grow your business? An accountant can help with that, too. Good accountants can distill your financial statements into a digestible summary of your overall cash flow. 

Understanding your company’s financial health can be a great first step to discovering growth opportunities. An accountant can point out ways to leverage your assets so that your business can grow and flourish without sacrificing the organizational strategies necessary for filing taxes.

When certified public accountants handle the books, you can focus on the day-to-day operation of your business.

We Handle the Books; You Handle the Business

Ready to hire an accounting professional for your small business? As you’ve seen, there are many benefits of hiring an accountant. The average base salary for a Florida accountant is over $50,000, plus benefits. Most small businesses simply can’t afford to hire someone for the position. If your company needs bookkeeping services in Orlando, where can you turn?

This is where Xendoo truly shines. With our localized knowledge, we can provide expert  Tampa bookkeeping services as well as almost anywhere in Florida. You won’t have to pay a full-time professional or contract with expensive accounting firms.

Businesses grow when they are well-managed, and an accountant can handle the books while you run the business. When you’re ready to stop juggling the books and get back in business, contact us and see how our online services can help your business to thrive.

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

A woman stress bites a pencil going over her Florida business taxes

How to File a Business Tax Extension in Florida

With so many day-to-day responsibilities that go into running a small business, such as inventory accounting, staffing, bookkeeping, and marketing, it can be easy to forget about the tax deadline. Yet, before you know it, their tax deadline came and went. 

Without a filed return, you may be wringing your hands and asking yourself questions on what to do next. Can you even make payments after a down year? Do you have the necessary paperwork? What do you do now that they’ve missed their deadline? Chances are that you are not alone, but don’t panic. Florida allows businesses to file a tax extension, but you can’t wait too long. Putting it off even further could increase your penalties and put you in financial hardship.

We’ll walk you through the process for filing a Florida business tax extension, so you can keep your business moving without the added stress. 

What is the Deadline for the Florida Business Tax Extension?

Different deadlines apply for federal and state taxes. Below are the deadlines for Florida’s state tax extension and the federal tax extension. 

State Tax Extension

Tax returns for Florida businesses are due by May 1 (the 1st day of the 4th month following the end of the taxable year). However, Florida allows for a six-month extension, which would move the new deadline to November 1st.

Federal Tax Extension

2021 tax deadlines have the following due dates:

  • Sole proprietorships and single-owner LLCs: May 17, 2021
  • Partnerships: March 15, 2021
  • S Corporations: March 15, 2021
  • C Corporations: April 15, 2021 

A Florida partnership or business has the option to file for a six-month extension, which would move the deadline to the following dates:

  • Sole proprietorships and single-owner LLCs: November 17, 2021
  • Partnerships: September 15, 2021
  • S Corporations: September 15, 2021
  • C Corporations: October 15, 2021 

Be prepared to pay a deposit for the taxes you owe. You will also be expected to pay your first quarterly taxes for your business on this date.

What Forms Do I Need to File to Apply for a Florida Business Tax Extension?

The form you need will depend on the type of business you’re operating. For the Florida business tax extension, you will first need to complete the form for a federal tax extension:

Please note that if you are filing for a federal tax extension, you must also file for an extension with the state of Florida. However, an approved federal extension will not guarantee an extension with the state.

Can I Pay My Balance When I Submit an Extension?

Businesses will have the option to pay their balance when they file for an extension, but all businesses should be prepared to pay at least a down payment for the taxes that they owe.

How Do I Submit My Forms?

It’s faster and easier to file electronically. Form 7004 can either be submitted electronically to the Florida Department of Revenue through Florida’s “File and Pay” e-service system or through the postal service by mailing your completed form to the following address:

Florida Department of Revenue

5050 W. Tennessee Street

Tallahassee, FL 32399-0135

You do not have to send payment with your tax form, but you should be prepared to pay a deposit, as we already noted. Moreover, you should also account for possible late charges or penalties.

Can I File My Extension Electronically?

You may file Form 7004 through Florida’s “File and Pay” e-service system. Most tax preparation software can interface with this system, though if you have trouble, you may wish to contact your software provider or consider filing on paper.

What Happens if I Don’t Pay My Taxes?

If you pay your taxes late, charges will apply in the amount of 10% of your unpaid taxes. An additional 10% will accrue every month in which your taxes are unpaid, up to a possible penalty of 50% of your total outstanding taxes. Underpaying your taxes could also result in interest being applied, though this number varies.

If you don’t owe Florida taxes, you must still file for this fiscal year. Failing to do so can result in a late charge of $50 per month, up to a possible total of $300.

Can Xendoo Help with My Florida Business Tax Extension?

Our bookkeepers and tax specialists are well versed in Florida small businesses and can ensure that your taxes are filed correctly and on time. Plus, Xendoo’s financial experts can keep your records up to date and accurate, so you aren’t panicking but prepared when tax season comes around. If you’re looking for bookkeeping services in Orlando and the surrounding areas, Xendoo can help you to complete forms, meet deadlines, and more. 

Xendoo offers tax and bookkeeping services all over Florida, including:

When you need help, we’re only a click away. Reach out to our team today!

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

2021 Tax Deadlines

Keep this chart handy or copy the relevant parts of it into your calendar so you won’t miss a due date throughout the year.

February 1, 2021:

W-2 Filing: Wage and tax statement for full- and part-time employees. These are normally due on January 31st, but since this is a Sunday, the deadline will fall the following day. 

1099s: Are issues to independent contractors. You will need to issue them a 1099-NEC. Both Copy A and Copy B are due at the same time.

February 12, 2021:

The IRS will begin accepting 2020 tax returns starting 2/12/21.

March 1, 2021:

Form 1099-MISC if you are paper filing.

S Corporation Tax Filing 

March 15 Submit Form 1120S Income Tax Return

March 15 File for an extension

Partnership Tax Filing

March 15 Submit Form 1065 Income Tax Return

March 15 File for an extension

C Corporation Tax Filing

April 15 Submit Form 1120 Income Tax Return

April 15 File Form 7004 Application for an Automatic Extension of Time

LLC Filing as Corporation Tax Filing

April 15 Submit Form 1120 Income Tax Return

April 15 File Form 7004 Application for an Automatic Extension of Time

Individual Tax Filing

(Sole Proprietor, Independent Contractor)

April 15 Submit Form 1040, 1040A or 1040EZ Income Tax Return

April 15 File for an extension

Estimated Quarterly Tax Payments

Q4 2020 (January 15) Send final 2020 payment with Form 1040-ES Payment Voucher 4

Q1 2021 April 15  for first 2021 payment with Form 1040-ES Payment Voucher 1

Q2 2021 June 15  for  second 2021 payment with Form 1040-ES Payment Voucher 2

Q3 2021 September 15 third 2021 payment with Form 1040-ES Payment Voucher 3

 

Some types of businesses may have different or additional deadlines and requirements. Consult with your accountant or tax advisor early in the year to make sure you meet your obligations.

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

The Ultimate Tax Deductions Checklist for Small Business Owners

Are you claiming all the income tax deductions you’re entitled to? Here’s a handy checklist for U.S. businesses that are structured as sole proprietorships, partnerships, or limited liability companies (LLCs).

Home Office

The portion of your home that you use for an office can qualify you for a wide range of deductions, as long as that area is used exclusively and regularly for business purposes.

First, figure out the square footage of that area (the maximum allowed is 300 square feet). Then figure out what percentage that is of your home’s total square footage. That’s the percent you can deduct for home-related expenses including:
• Repairs and maintenance
• Utilities
• Security

As an alternative to itemizing these deductions, you may choose to take a standardized deduction of $5 per square foot of the area used for business.

Property Insurance

Deduct insurance premiums on the company’s real estate holdings and equipment. If you work from a home office, you are eligible to take this deduction for your homeowner’s or renter’s insurance.

Medical Care and Insurance

As a self-employed business owner, you can deduct the premiums of your personal health, dental and long-term care insurance, as well as those of your spouse and/or dependents. But if your spouse’s employer offers a plan that covers you, you won’t be able to claim a deduction on any other plan.

Out-of-pocket medical expenses, such as doctor and hospital fees, in-home care, and medications, can be deducted on your 2018 return if they exceed 7.5% of your adjusted gross income. In 2019, that minimum goes up to 10%.

Child and Dependent Care

This includes the costs of hiring care for your children (age 12 or younger) and individuals (of any age) who are physically or mentally incapable of self-care. If you were working or looking for work while the care took place, these expenses are 100% deductible.

Real Estate Taxes

Any real estate taxes you pay to your state, city, and even another country are deductible.

Interest

Deduct the amount of interest you paid on:
• Business loans
• Business credit cards
• Mortgage loans to buy or improve your home or business property
• Home equity loans
• Money borrowed for investment (if the investment has more interest than income, you can carry forward the overage to next year)

You can also deduct bank fees and charges on business accounts.

Depreciation on Equipment

This deduction helps offset the cost of expensive equipment such as computers and vehicles. You can take the entire amount in the year you bought the item or spread it out over the years that you own it. Which is the better route depends on the expected life of the equipment and other factors; your tax advisor can help you make the right decision.

Energy Efficiency Improvements

You may be able to deduct 30% of the cost of alternative energy equipment in your place of business (including your home if you work from a home office), such as:
• Solar electric equipment
• Solar water heater
• Wind turbines

Salaries and Benefits

What you pay employees (other than the company’s owner, partner, or LLC member) is deductible. Wages, benefits, and even paid time off are included.

Telephone and ISP Charges

As long as you’re using these services for business, they’re deductible. If your phone and internet are used for both business and personal communications, you’ll have to document the percentage of business use.

Car Expenses

For any vehicle used solely for business purposes, you can deduct 100% of the costs of operation. If you use your car for both personal and business trips, you must divide up the costs.

You can either itemize the actual costs of fuel, depreciation, registration fees, parking fees, etc. or take a standard mileage deduction (which is easier and maybe to your benefit if your actual costs are less than the standard rate). The mileage rate changes each year; for 2018 it’s $0.545 per mile.

Meals

Deduct 50% of business-related food and beverage costs. Be sure to keep receipts showing the amount of the expense, place, and date of the meal and business relationship of the person(s) whose meal you paid for.

Travel Expenses

A business trip that is ordinary, necessary, and far enough away from the tax home that you would need to sleep or rest before completing it qualifies for tax deductions. Allowable expenses include:
• Travel to and from the destination
• Shipping of baggage and work materials to the destination
• Taxis, car rental, parking and toll fees
• Lodging and meals
• Tips
• Business calls
• Dry cleaning

Education

Deduct 100% of the costs associated with increasing your knowledge and expertise that adds value to your business. These include:
• Classes, seminars, webinars and workshops
• Books and subscriptions to trade publications
• Transportation expenses to and from the education venue

Professional and Legal Fees

This deduction covers any consultants you hire in connection with running your business, including attorneys, accountants, tax preparers and advertising agencies.

Advertising and Promotion

These costs are 100% deductible. They include:
• Newspaper, magazine, radio, TV, internet and billboard ads
• Printing flyers, sales letters, business cards, and forms
• Postage costs for direct mail promotions
• Trade show entry fees or booth rental

Charitable Contributions

As long as the contribution is made to a qualified organization, you can deduct this on your personal tax return.

For more information about tax planning and filing for small businesses, please consult your Xendoo team.

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

Important Tax Dates for Q3 & Q4

September 10 — Employees who work for tips

If you received $20 or more in tips during August, report them to your employer

September 15 — Individuals

Make a payment of your 2020 estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the third installment For more information

September 15 — S Corporations

File a 2019 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you timely requested an automatic extension

September 15 — Partnerships

File a 2019 calendar year return (Form 1065). This due date applies only if you were given an additional extension

September 15 — Corporations

Deposit the third installment of estimated income tax for 2020

October 11 — Employees who work for tips

If you received $20 or more in tips during September, report them to your employer

October 12 — Everyone

Federal Holiday (Columbus Day)

October 15 — Individuals

If you have an automatic extension to file your income tax return for 2019, file Form 1040 and pay any tax, interest, and penalties due

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

(Updated) 2020 Tax Deadlines for Small Businesses

Keep this chart handy or copy the relevant parts of it into your calendar so you won’t miss a due date throughout the year.

W-2 Filing

(Wage and Tax Statement for Full- and Part-Time Employees)

January 31

Form 1096 Filing

(Information Return by Employers to the IRS on Form 1099s Issued to Independent Contractors)

February 29

Form 1099-MISC Filing

(Statement of Payments Made to Independent Contractors)

January 31 Copy A paper or electronic submission to the IRS if box 7 is filled in

January 31 Copy B to the contractor

February 28 Copy A paper submission to the IRS if box 7 is empty

March 31 Copy A electronic submission to the IRS if box 7 is empty

S Corporation Tax Filing

(for a calendar tax year)

March 16 Submit Form 1120S Income Tax Return

March 16 File for an extension

Partnership Tax Filing

(for a calendar tax year)

March 16 Submit Form 1065 Income Tax Return

March 16 File for an extension

C Corporation Tax Filing

(for a calendar tax year)

July 15 Submit Form 1120 Income Tax Return

July 15 File Form 7004 Application for an Automatic Extension of Time

LLC Filing as Corporation Tax Filing

(for a calendar tax year)

July 15 Submit Form 1120 Income Tax Return

July 15 File Form 7004 Application for an Automatic Extension of Time

Individual Tax Filing

(Sole Proprietor, Independent Contractor)

July 15 Submit Form 1040, 1040A or 1040EZ Income Tax Return

July 15 File for an extension

Nonprofit Tax Filing

July 15 Submit Form 990

July 15 File for an extension

Estimated Quarterly Tax Payments

Q4 2019 (January 15) Send final 2019 payment with Form 1040-ES Payment Voucher 4

Q1 2020 Extended Deadline (July 15) for first 2020 payment with Form 1040-ES Payment Voucher 1

Q2 2020 Extended Deadline (July 15) for  second 2020 payment with Form 1040-ES Payment Voucher 2

Q3 2020 Regular Deadline (September 15) third 2020 payment with Form 1040-ES Payment Voucher 3

 

Some types of businesses may have different or additional deadlines and requirements. Consult with your accountant or tax advisor early in the year to make sure you meet your obligations.

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Income Tax Q&A: IRS Form 8879

What is form 8879?

Form 8879 is an electronic signature document that is used to authorize e-filing. It is generated by the software using both the taxpayer’s self-selected PIN and the Electronic Return Originator’s (ERO’s) Practitioner PIN. Form 8879 does not need to be mailed to the IRS but instead is retained by the ERO, in this case, Xendoo.

Who must sign an 8879?

When you use a third-party tax preparer, you are required to review and sign the 8879.

What is important to note when signing the 8879?

At the top of the 8879 is a lot of filled information used to identify you and summarize your tax return information. It’s important to note when you sign your 8879, you are certifying that all the names, SSNs, and amounts are correct.

Where can I find the 8879?

For Xendoo customers, we will provide you with an 8879.  Otherwise, you can find it on the IRS website here. Look at this link

It’s important to read the first line of Part II. Here it is for your convenience:

Under penalties of perjury, I declare that I have examined a copy of my electronic individual income tax return and accompanying schedules and statements for the tax year ending December 31, 2019, and to the best of my knowledge and belief, they are true, correct, and complete.

This is where the tax party is certifying, under penalties of perjury, that your entire tax return and accompanying schedules and statements are “true, correct, and complete.”

What is the role of the CPA?

Our responsibility as tax preparers is to provide a tax return that is accurate, given that the information you provide us is accurate. We may be tax experts, but we can’t read your mind. We don’t know if you’re holding any information back, even accidentally. This is one of the reasons we ask a lot of questions such as: Have you bought or sold a house in the last year?  Is this all your income?

Undeclared income is something that gets a lot of people in trouble, and we can only do so much to assess whether you are declaring all of your income. Errors of omission often happen by accident of course.

What are the Taxpayer Responsibilities?

On page two you will find the following instructions and fine print.

Most of these instructions are procedural, but please note the phrasing of Item 1:

Taxpayers have the following responsibilities.

1. Verify the accuracy of the prepared income tax return, including direct deposit information.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Updated 3/20: Tax Filing Deadline has been extended to July 15th

The IRS is extending the federal income tax filing deadline to July 15 as part of a growing effort to stem the financial pain from the coronavirus pandemic, Treasury Secretary Steven Mnuchin announced Friday.

There’s one bit of relief for businesses suffering from the effects of the COVID-19 pandemic: You now have until July 15, 2020, to pay your federal income tax. Read the full press release here.

If you owe taxes, the Treasury Department has extended the payment deadline for individuals and businesses for 90 days. The extension is automatic; you don’t have to file any extra forms to get it.

However, you still must file your tax return by April 15.

If you are expecting to receive a refund, the sooner you file, the sooner you’ll get that money. For tax return forms filed electronically, it usually takes about three weeks to receive your refund.

Individual Returns

The July 15 payment extension applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. 

It also includes estimated tax payments for the 2020 tax year that were due on April 15.

C-Corporation Returns

The tax payment deadline is extended to July 15 for up to $10 million of the 2019 tax due.

Need More Time to File?

As in every other year, you can get a 6-month extension of your filing date from the IRS. You don’t need to give a reason, it is automatically granted after you apply. 

File the application form through your tax professional, tax software, or irs.gov Free File.

Be aware, though, that even with the filing extension, you would still owe taxes and penalties on any taxes that are unpaid as of July 16. 

State Income Tax

The Treasury Department’s tax payment extension only applies to federal taxes, not your state’s. Check with your state agency to see what (if anything) they are changing to meet the COVID-19 crisis. Here’s a list of links to state revenue departments.

As small business specialists, Xendoo is well aware of the impacts COVID-19 has had — and will have — on the finances of owners and employees alike. We stand ready to help you through this difficult time. Experience the Xendoo difference with a one-month free trial.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.