The Deadline to file corporate tax returns (forms 1120, 1120A, and 1120S) is Tuesday March 15th, 2016. Most corporate returns are required to be filed electronically therefore they must be sent to the IRS before midnight on the 15th. If for some reason you are filing a paper corporate tax return, the post mark on the envelope must show 11:59pm or earlier in order to avoid late filing penalties.
If you require more time to file your corporate return, you can request a 6-month extension by filing federal Form 7004 and any corresponding state(s) extensions, however these too must be electronically filed or mailed before the March 16th Deadline.
Divorce can be a sensitive topic and a difficult period of time for all the parties involved. Whether you live in a common law or community property state, the process of filing taxes once the divorce has been finalized can be both emotional and complicated. Deciding how assets are split, the cost basis of these assets, new filing status and even which former spouse will claim children as dependents are all important considerations that go into the tax filing process after divorce. Here are 5 things to keep in mind when filing taxes after a divorce.
#1 Determine Which Taxpayer Will Claim Children as a Dependent
After 2009 a tax filer with shared custodial rights of a child or children must cede their claim for a tax exemption to the controlling ex-spouse by filing Form 8332. The significance of this filing should not be taken lightly. A custodial parent who is able to claim a child as a dependent is permitted a deduction of $3,900 on their tax return, which reduces their taxable income. This applies to all children living at home at least 6 months old up to age 19, or 24 if the child is a full-time college student.
#2 Determine Your New Tax Filing Status
A divorce will change a formerly married filing separately or joint filing status to single, regardless of when the divorce was finalized within the tax year. Also consider that if you want to file as head of household, you will have had to have lived apart from your ex-spouse for at least six weeks and contribute more than half of the money to support the household. Being able to file as head of household can result in a bigger tax savings, so review your situation–or have and experienced tax professional review your situation–carefully.
#3 Understand the Impact Alimony Will Have Upon Divorce
Alimony may be necessary as a source of income for a divorcing spouse that has either stopped working, is returning to the workforce or is making significantly less than the other spouse. Be careful, however, as alimony payments made from one spouse to another are considered taxable income to the recipient spouse. Depending on your income level, if you are the one receiving alimony from your former spouse, the additional income could affect your tax bracket potentially pushing you into a higher bracket and a bigger tax liability.
#4 Understand the Impact of Dividing Assets Upon Divorce
There are some tradeoffs that come when assets are divided, particularly a home. Gains that may have been subject to exemption as a result of a sale, for example, would be halved if the asset is sold under a divorce decree. The spouse who receives the home as part of the divorce settlement (if a sale is not ordered) will have the ability to claim the mortgage interest deduction. Discuss with a tax professional carefully how the receipt or sale of certain assets will show up on your tax return and what tax benefits or disadvantages you will receive or give up.
#5 Understand How Divorce Will Affect Your Retirement Plan
Many times divorce results in the splitting up of retirement assets held by a working spouse, such as those held in an IRA or 401(k). Be sure to secure what is known as a qualified domestic relations order (QDRO) in order to secure treatment of these assets as your personal retirement assets and not those of your former spouse. Failure to do so could result in disastrous tax treatment once those assets pass from one spouse to another, such as in the case of death.
It’s important to take all the details of a divorce into account when filing your taxes. If you have questions about what you are entitled to and how your tax status is changing after a divorce, don’t hesitate to contact an experienced R&G Brenner tax professional.
If you’re planning a wedding in the future or you’ve just tied the knot, congratulations! You’ve made a major life move that should be celebrated. And as the responsible person that you are, there’s no doubt that you’ve given a lot of thought to what marriage will mean, including any financial benefits, obligations, or just plain life changes. To answer these questions, here’s a succinct briefing on taxes for married couples. Read on for all you need to know about new tax credits and deductions that you may qualify for, whether or not you should file a joint tax return together or separately, and special circumstances that may apply to you.
Should We File as a Couple or Individually?
A lot of people are concerned about receiving a “marriage penalty” from the IRS—that is, being taxed more for combing incomes, putting you (and your spouse) in a higher income bracket. Naturally, the IRS applies higher tax rates to higher incomes. If you and your spouse’s salaries are similar, then there’s a good chance that you may indeed have to pay more taxes. However, if you and your spouse have a large disparity in personal income levels, then there’s a good chance that you’ll actually be receiving a bit of a tax bonus by getting married. The larger the disparity in incomes, the more likely that getting married and filing a joint return will push the higher earner’s income into a lower bracket, meaning that the two of you will actually pay less in taxes.
What Deductions or Tax Credits Do We Qualify for?
One of the benefits of getting married is being able to qualify for more charitable donation deductions by combining incomes, putting you in a higher tax bracket and therefore increasing the number of charitable contributions you can claim on your taxes. Another benefit is that if one spouse isn’t employed, they can still open an IRA account, putting away money for retirement and receiving tax benefits. If you and your spouse are also purchasing a home for the first time, there are a lot of tax deductions for first time home-buyers as well. Being married also can protect a spouse who acts as a benefactor in the unfortunate case that one spouse, particularly a wealthy spouse, passes away. A deceased spouse can leave tax-free money to a spouse, in any amount, without generating any estate tax, protecting the benefactor. Another benefit? Filing one tax return form instead of two is simply quicker and more efficient.
Are There any Special Circumstances that Might Apply?
The date that you’re married matters—marriage is counted for the entirety of the year, even if you’re wed on New Year’s Eve. Therefore, if you’re planning an end of the year wedding, keep in mind that you can file taxes as a married couple for the preceding months of the year. Another thing that may be applicable is what to do in the event that one of you owes back taxes. In this case, the spouse who doesn’t owe the back taxes can file a special document known as an 8379 Injured Spouse Allocation Form. The form ensures that the spouse who doesn’t owe back taxes still receives their tax return, even in the event that the spouse who does owe back taxes has his or hers withheld.
WASHINGTON — The Internal Revenue Service today announced plans to open the 2014 filing season on Jan. 31…
The new opening date for individuals to file their 2013 tax returns will allow the IRS adequate time to program and test its tax processing systems. The annual process for updating IRS systems saw significant delays in October following the 16-day federal government closure.
“Our teams have been working hard throughout the fall to prepare for the upcoming tax season,” IRS Acting Commissioner Danny Werfel said. “The late January opening gives us enough time to get things right with our programming, testing and systems validation. It’s a complex process, and our bottom-line goal is to provide a smooth filing and refund process for the nation’s taxpayers.”
The government closure meant the IRS had to change the original opening date from Jan. 21 to Jan. 31, 2014. The 2014 date is one day later than the 2013 filing season opening, which started on Jan. 30, 2013, following January tax law changes made by Congress on Jan. 1 under the American Taxpayer Relief Act (ATRA). The extensive set of ATRA tax changes affected many 2012 tax returns, which led to the late January opening.
The IRS noted that several options are available to help taxpayers prepare for the 2014 tax season and get their refunds as easily as possible. New year-end tax planning information has been added to IRS.gov this week.
In addition, many software companies are expected to begin accepting tax returns in January and hold those returns until the IRS systems open on Jan. 31. More details will be available in January.
The IRS cautioned that it will not process any tax returns before Jan. 31, so there is no advantage to filing on paper before the opening date. Taxpayers will receive their tax refunds much faster by using e-file…with the direct deposit option.
The April 15 tax deadline is set by statute and will remain in place. However, the IRS reminds taxpayers that anyone can request an automatic six-month extension to file their tax return. The request is easily done with Form 4868, which can be filed electronically or on paper.
IRS systems, applications and databases must be updated annually to reflect tax law updates, business process changes and programming updates in time for the start of the filing season.
The October closure came during the peak period for preparing IRS systems for the 2014 filing season. Programming, testing and deployment of more than 50 IRS systems is needed to handle processing of nearly 150 million tax returns. Updating these core systems is a complex, year-round process with the majority of the work beginning in the fall of each year.
About 90 percent of IRS operations were closed during the shutdown, with some major work streams closed entirely during this period, putting the IRS nearly three weeks behind its tight timetable for being ready to start the 2014 filing season. There are additional training, programming and testing demands on IRS systems this year in order to provide additional refund fraud and identity theft detection and prevention.
The IRS is accepting 2013 Business Returns (Forms 1120, 1120S, 1065, 1041, 720, 940, 941, 2290) for filing January 13th, 2014.
In spite of the government shutdown that has shuttered many departments in the IRS, the deadline to file tax year 2012 returns remains October 15th. That means, even though the IRS may not be able to process your return, you still have to pay your taxes on time or risk penalties and interest for failing to file. The IRS has issued the following tips:
Taxpayers are encouraged to file their returns electronically using IRS e-file or the Free File system to reduce the chance of errors.
Taxpayers can file their tax returns electronically or on paper. Payments accompanying paper and e-filed tax returns will be accepted and processed as the IRS receives them. Tax refunds will not be issued until normal government operations resume.
IRS operations are limited during the appropriations lapse, with live assistors on the phones and at Taxpayer Assistance Centers unavailable. However, www.IRS.gov and most automated toll-free telephone applications remain operational.
Tax software companies, tax practitioners and Free File remain available to assist with taxes during this period.
Many taxpayers–especially living in coastal NY & NJ–have not filed yet due to the destruction inflicted by Hurricane Sandy on property and tax records. If you need assistance filing your tax returns, an R&G Brenner tax professional can help.
In a landmark ruling announced by the Obama administration, married same-sex couples shall be treated as any other legally married couple–at least in the eyes the Internal Revenue Service for tax purposes. This announcement follows and is consistent with the recent Supreme Court ruling which struck down the constitutionality of The Defense of Marriage Act (DOMA) which only recognized “marriage” between that of a man and a woman.
Importantly, this ruling is limited to couples who have been legally wed in the 13 states that allow same-sex marriages; California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont and Washington. These guidelines do not apply to those classified as being in Civil Unions or Domestic Partnerships. However, all married same-sex couples will be able to file joint tax returns, even if they currently reside in states that do not recognize same-sex marriages.For example, if a couple was married in New Hampshire in 2010, and recently moved to North Carolina, they will still be recognized as a married couple for Federal Tax purposes (but may still be required to file separately for state tax purposes).
This ruling offers immediate tax benefits for same-sex couples:
The biggest financial bonanza for some couples will be the tax exclusion for employer-paid health insurance, which many same-sex spouses previously bought on an after-tax basis. That could be worth more than $1,000 per couple.
“This is uniformly good for everybody,” said Todd Solomon, a lawyer who specializes in pension plans and benefits. “Their health benefits just went from taxable to non-taxable.”
Chad Griffin, president of the Human Rights Campaign, the nation’s largest gay-rights group, said same-sex families “finally have access to crucial tax benefits and protections previously denied to them under the discriminatory Defense of Marriage Act.”
In conjunction with these health related savings, all same sex married couples may–but are NOT required to–file amended tax returns going back to tax year 2010. This could allow for additional refunds and/or for the off-set of tax liabilities that were previously unavailable to them. These guidelines apply to all Federal tax forms including Gift & Estate taxes, and will affect personal and dependent exemptions and deductions, employee benefits, IRA contributions and tax credits.
After the longest delay in history, the IRS is now accepting electronic and paper tax returns for tax year 2012 as of January 30th, 2013. The caveat is that many forms for both individual and business returns are further delayed including form 8863 Education credits. The IRS has offered no specific date–only a general time frame of mid to late February–as to when these forms will be accepted. If you are in real need of your refund and you are claiming one of the delayed forms, you could file your return without the forms in question and later amend your tax return to include these forms once the IRS approves them. The following are a list of forms that are still not approved by the IRS as of today:
Forms affecting mainly individual returns
Form 4136 Credit for Federal Tax Paid on Fuels
Form 4562 Depreciation and Amortization (Including Information on Listed Property)
Form 5695 Residential Energy Credits
Form 8396 Mortgage Interest Credit
Form 8582 Passive Activity Loss Limitations
Form 8839 Qualified Adoption Expenses
Form 8834 Qualified Plug-in Electric and Electric Vehicle Credit
Form 8910 Alternative Motor Vehicle Credit
Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit
Forms affecting mainly business returns
Form 3800 General Business Credit
Form 5074 Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands
Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations
Form 5735 American Samoa Economic Development Credit
Form 5884 Work Opportunity Credit
Form 6478 Credit for Alcohol Used as Fuel
Form 6765 Credit for Increasing Research Activities
Form 8820 Orphan Drug Credit
Form 8844 Empowerment Zone and Renewal Community Employment Credit
Form 8845 Indian Employment Credit
Form 8859 District of Columbia First-Time Homebuyer Credit
Form 8864 Biodiesel and Renewable Diesel Fuels Credit
Form 8874 New Markets Credits
Form 8900 Qualified Railroad Track Maintenance Credit
Form 8903 Domestic Production Activities Deduction
Form 8908 Energy Efficient Home Credit
Form 8909 Energy Efficient Appliance Credit
Form 8911 Alternative Fuel Vehicle Refueling Property Credit
Form 8912 Credit to Holders of Tax Credit Bonds
Form 8923 Mine Rescue Team Training Credit
Form 8932 Credit for Employer Differential Wage Payments
The IRS plans to begin processing 2012 tax returns January 30, 2013, it has announced. With the massive fiscal cliff tax bill enacted January 2 that is mostly retroactive, the IRS has its work cut out for it. There are forms and instructions to revise, not to mention computers to retool. While the IRS says that it worked to anticipate Congress’ last minute tax law changes, the final law required the IRS to do considerable updating and processing before accepting tax returns.
The good news is that the vast majority of tax filers — more than 120 million households according to the IRS – should be able to start filing their tax returns January 30. In fact, the IRS notes that it will be able to accept tax returns impacted by the retroactive AMT patch as well as the three big extender provisions:
People claiming the state and local sales tax deduction;
Higher education tuition and fees deduction; and
Educator expenses deduction.
Waiting to File? Despite the massive IRS effort to get filing going right away, some taxpayers will need to wait until late February or March. Examples include people claiming residential energy credits, depreciation of property or general business credits. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March. The IRS says it will announce a specific date in the near future. Key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available onIRS.gov.
Even though Electronic filing has been pushed back to January 30th, R&G Brenner encourages all taxpayers to file as soon as they can. Both NY State and the IRS have delayed refunds due to budget constraints in the past. Those that file earlier will be queued up and ready to be transmitted to the IRS/State(s) as soon as the “gates” are opened, and this will reduce the chances that your refund is affected by any potential budget issues. Contact an R&G Brenner professional today. We are open and ready to assist you.
Congress might have averted the “fiscal cliff,” but its last-minute action has created some big headaches and questions for tax filers.
“There’s a couple of impacts that I’ve never seen – this is my 44th tax season,” said John Hewitt, founder of Virginia Beach-based Liberty Tax Service and Jackson Hewitt, two of the nation’s largest tax-preparation companies.
Those who want to file a 1040 form electronically – the option favored by more than 90 percent of taxpayers – can’t do that yet because the Internal Revenue Service hasn’t signed off on finalized forms.
“Right now, a 1040 can’t be released,” Hewitt said. “It has a watermark on it saying, ‘Do not file.’ “
Filing paper forms probably won’t be possible until the end of the month, he said.
Taxpayers who like to knock out their federal and state returns together – whether filing themselves or using a tax preparer – face further delays because many of the states that collect income taxes don’t have their forms ready either.
“Typically, as of Jan. 3, we would be ready to go and fully tested in all the states that have income taxes,” Hewitt said in an interview Thursday. “Well, this year, only about a dozen of the states are ready to go because they’ve all been waiting on the federal government to act before they can finalize their forms and tax rates and so forth.”
Virginia will be ready by Monday, Hewitt said.
An IRS spokesman said Thursday that he could not say when new forms would be approved or whether there would be any adjustment of key dates for tax filings.
“Those decisions are under way and should be coming out relatively quickly, so stay tuned,” he said.
New legislation such as the fiscal package just approved by Congress needs to be reviewed, and IRS computer systems need to be configured to adhere to the bill’s provisions, the IRS spokesman said.
“These things don’t happen in a matter of hours; it takes days.”
Months ago, the Internal Revenue Service set Jan. 22 as the start date for the filing of electronically transmitted, computer-generated tax returns – the latest start date since electronic filing began in the late 1980s, Hewitt said.
“Those people that want their money quickly, that want their money in just a couple of weeks, are going to get it a week later than at any time since electronic filing was invented 25 years ago,” he said.
Carolyn Buzek is a Jackson Hewitt franchisee with eight offices in the Hampton Roads area.
“The IRS gets a bum rap in a lot of cases,” she said, adding that “everybody blames them for why you can’t file.”
“Well, it’s really Congress that makes the decisions, and the IRS has to scramble and try to figure out when you have the wording,” Buzek said. “Some of this is getting pretty complicated.”
California-based Intuit, maker of TurboTax, offers both online and desktop products enabling taxpayers to file their own returns. Electronically completed forms are transmitted to the company, which sends them to the IRS when it’s ready to receive them, Ashley McMahon, a spokeswoman, said Thursday.
Both products include prompts instructing users to download updates.
Hewitt said one of the biggest burdens his company will face this year is having to deliver the bad news to some customers that they will be getting their refunds late.
“These are people who live paycheck to paycheck,” he said, adding that they typically get returns averaging about $3,000.
Another burden is internal, affecting the biggest component of Liberty’s workforce – about 100 computer programmers.
Typically, they get information in October from the states with income tax.
“They have from October to January to get ready,” Hewitt said of his company’s programming staff. “Well, now we have only a few weeks to get ready.”
Hewitt said U.S. taxpayers are facing a situation “unheard of in the annals of tax preparation.”
“I don’t think Congress really understood the impact of what’s going to happen with tax filing this season,” he said. “Maybe they didn’t care.”