Tax Document Checklist: Click here

Business Deduction Checklist: Click here

Rental Property Deduction Sheet: Click here

State Refund Status: Click here

Federal Refund Status: Click here

• -Report all income correctly including stock sells.
• -Not exaggerating business losses.
• -Not overstating your deductions.
• -lnputting entries on the correct forms, schedules and line items.
• -Not relying on software programs to guide you.
• -Working with a knowledgeable licensed tax professional.

*Keep all documents 4 years after filing your taxes.
*Payroll information should be kept at least 6 years.
*Asset documentation should be kept indefinite.

• Cancelled Checks and Check Register
• Bank and Credit Card Statements
• Cash Receipts and Invoices
• Billing Statements
• Payroll Records
• Pension Account Summary
• Stock Brokerage Statement
• Closing or Settlement Statement
• Bill of Sale
• Loan Statement
• Home Improvement Invoices
• Appraisal Report
• Newly Purchased Assets
• Theft/Fire Casualty Loss Documents
• Insurance Policy Statement
• Education Records
• Medical Records
• Gifts & Travel Records
• Vehicle Maintenance Records

*If due date falls on weekend or holiday then the tax return is due on the next business day.

January 31st:

• Form W-2 Statement to employees
• Form W-2 Copy A Social Security Administration
• Form W-3 Transmittal
• Form 941 – 4th Q. Employers Federal Tax Return
• Form 944 – Employers Annual Federal Tax Return
• Form 940 – Employers Annual Federal Unemployment Tax

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March 15th:

• Form 1065 Partnership Due Date
• Form 1120S S-Corporation Due Date

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April 15th:

• Form 1040 Individual Due Date
• Form 1120 Corporation Due Date
• 1st Estimated Tax Payment

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April 30th:

• Form 941 – 1st Quarter Filing Employer Federal Tax Return

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June 15th:

• 2nd Estimated Tax Payment

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July 31st:

• Form 941 – 2nd Quarter Filing Employer Federal Tax Return

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September 15th:

• 3rd Estimated Tax Payment
• Corporation Extension Deadline

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October 15th:

• Individual Extension Deadline

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October 31st:

• Form 941 – 3rd Quarter Filing Employer Federal Tax Return

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January 15th:

• 4th Estimated Tax Payment

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Professional help can be costly, so individuals attempt to save money by filing forms themselves. They read, “Do It Yourself” books and buy easy to use tax software programs in order to cut costs.

Yes, professional help may seem expensive initially but can save you lots of time and money in the long run. Competent tax professionals are knowledgeable and able to explain your tax position in case of an audit.

Tax professionals are up to speed on changes in tax laws, tax compliance, new regulations and special tax treatment.

Always use tax professionals such as Enrolled Agents, Certified Public Accountants or Tax Attorneys.

• Federal and/or State withholding calculations too high
• Estimated Tax payments too low
• Distribution from IRA or 401k plans
• Received Unemployment Compensation with no withholding
• Sale of Business Assets or Investment Property
• Lawsuit settlement
• Sales of stocks or securities
• Foreclosure on home or other assets
• Credit Card debt forgiveness
• Receipt of Alimony due to divorce
• Untaxed bonuses
• Social security Benefits / Disability income exceeds base amount
• Marketplace healthcare premiums paid based on income and family size

There are more factors that determine whether you end up with a tax debt beyond what you expected. The only way to know for sure is to get advice from an experienced tax professional that will carefully review your situation.

Sole Proprietorship is the easiest business to organize and discontinue. Sole Proprietorship businesses consist of one individual who carries on an unincorporated business subject to a 15.3 percent self employment taxes on its net earnings. Ordinary and necessary business expenses are deductible. If sued the proprietor’s personal assets can be taken to satisfy the plaintiff’s claim.

Limited Liability Company (LLC) is an entity formed under state law. A single member is by default a disregarded entity separate from its owners. Articles of Organization are filed with the State of formation. Operating Agreement governs operation of the business entity. LLC is a combination of Corporate and Partnership rules. LLC gives members limited liability protection up to the amount invested.

Partnership is an organization having two or more persons or entity that functions as a trade or business. A written Partnership Agreement is recommended, but not required. An LLC with two or more members is generally classified as a Partnership. Partnerships income, losses, gains and deductions are allocated to partners and included in their income tax returns.

S Corporation is an incorporated business that must be elected and accepted by the federal government. Domestic corporations with one class of stock are eligible to be an S Corporation. S corporations are limited to 100 shareholders. S Corps are taxed similar to partnerships where income and expenses flow through to the shareholders. Shareholders who perform work for the corporation are considered employees and wages paid are subject to payroll tax withholding.

C Corporation can be expensive to organize and discontinue. For a firm to incorporate legal documents such as bylaws and Articles of Incorporation must be drafted, board of directors must be assigned and periodic meetings held preparing minutes. Good record keeping is essential in tracking shareholder’s basis, profit and loss, cash flow and balance sheet of the corporation.

If you treat workers as independent contractors and later it is determined they should have been treated as employees, it can be costly. You could incur additional tax penalties and interest for misclassifying workers.

DETERMINING FACTORS

Behavioral

• Do you control what the worker does?
• How the work is done?
• When and where to do the work?
• Provide training?
• Provide tools, equipment and supplies?

Financial

• How is the worker paid?
• Are the expenses reimbursed?
• Who provides the tools and equipment?
• Do you perform services for other companies?

Relationship

• Are there written contracts?
• Are there benefits such as insurance, pension plans and paid vacation?

As an employee, the employer must withhold federal income taxes, social security and Medicare taxes, state taxes and is responsible for paying unemployment taxes.

As an independent contractor, the contractor must complete Form W-9 and will be issued a Form 1099-Misc if paid $600 or more.

Tax Rates:

• Federal Tax Rates: 10% - 37%
• State Tax Rates: 3% - 6%
• Social Security Rate: 6.2%
• Medicare Rate: 1.45%
• Unemployment Insurance: 6.2%
• Self Employment Tax: 15.3%
• Capital Gains Rates: 0% - 20%
• C-Corporation: 21%

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Tax Penalties:

• Failure to File Return: $135 or 100% of amount of tax required
• Failure to Pay: 0.5% per month up to 25% per year
• Failure to make Tax Deposit (EFTPS): 2% up to 5 days late & 10% past 5 days
• Failure to maintain Health Insurance: $695 per adult & $347.50 per child under age 18
• Bounced Check Penalty: 2% of check amount or $25 dollars
• Late Filing: 5% of tax per month up to 25%
• Late Payment: 0.5% per month up to 25%
• Underpayment of Estimated Taxes: 25%
• Early Pension Distribution: 10%
• Excise Tax: 10%
• HSA/MSA: 6% excess tax
• Backup Withholding Tax: 28%
• Social Security Benefit Tax Levy: 15% of monthly benefits
• Accuracy Related Penalty: $1000 per return
• Preparer Undisclosed or Frivolous Returns: $1000 per return
• Preparer Tax Liability Understatement: $5000 per return
• Trust Tax: 5% per month up to 25%
• Employment Tax: 5% per month up to 25%

• Two thirds goes to Uncle Sam
• State, County and Local Government
• Social Security
• Social Services – Welfare
• Disability
• Unemployment Insurance
• Medicaid and Medicare
• National Defense
• Public Safety – Police and Firefighters
• Prisons and Courts
• Elementary & Secondary Schools
• Public Libraries

• Pay State Taxes before the year ends.
• Accumulate all sales tax receipts on big ticket purchases.
• Review your wage withholdings or estimated payments.
• Sell investments that are down so you can offset the loss against gains.
• Make equipment purchases before the year ends if you have a small business.
• Prepay bills or expenses before the year end.
• Fund a Health Savings Account. (The contributions are tax deductible)
• Consider restructuring your business operating as a sole proprietorship.
• Obtain written acknowledgement or receipt when making charitable contributions.