Tax Preparation Tips for Your Business
By Ludmila Popper, CPA, PFS
The jury is still out on what impacts the 2018 tax cut package will have on businesses as they file their 2018 tax returns this spring. CPAs like Ludmila CPA are bracing for the unexpected, and urging business clients to get all their ducks in a row as we move through tax season. If you’re a business owner, hopefully, you’ve sent out your W2s and 1099s and are preparing to file your returns.
Understanding the new laws and keeping the deadlines straight can be tricky, but here’s what you need to know to be as prepared as possible for tax time:
S-Corps, partnerships, and multiple-member LLCs must file returns (or extensions) by March 15. For LLCs, this deadline has only been in place for three years, and it may still not be a habit for many. But if you miss this deadline — whether you only miss it by one day or 30 — the penalty is $195 per month, per owner. There’s no prorating, so don’t miss that deadline. Can’t make the filing deadline? File an extension, which is available until September 16, but ONLY if you file for it by March 15 (Why September 16? Because the 15th is a Sunday).
Yes, tax day is actually April 15 this year. It’s been a while, thanks to a couple weekend day interruptions that forced Tax Day to fall later, but this year the day is April 15. Don’t miss it!
Business tax extensions are filed either electronically by tax preparers OR by mailing paper Form 7004. Accountants prefer electronic filing because you receive a record of acceptance from the IRS, which is not the case with paper forms (unless you use certified mail with return receipt, which would be your next best option).
C-Corps, trusts, sole proprietorships, and single-member LLCs must file by April 15. Sole proprietorships file their returns on their individual Schedule C forms by the standard filing date for individuals. This is also the date on which you’d need to file for an extension in order to avoid penalties. The extension would give you until October 15.
If your fiscal year ends on a day other than December 31 … your filing deadline is the 15th day of the fourth month AFTER the end of your fiscal year. So if your fiscal year ends July 31, you file on November 15.
Single-owner LLCs and partnerships run by married couples are disregarded entities, which file Schedule C by April 15. This means that their businesses are not seen by the IRS as distinct from their owners. These types of businesses file their returns on their individual Schedule C forms by the standard filing date for individuals (April 15). As if things weren’t already confusing, we should point out that this applies to LLCs organized in community property states, such as Nevada and California. In some states, LLCs owned by married couples may have to file separate tax returns, so be sure to speak with us about the rules in your state.
Don’t wait until your appointment with us to prepare your records! In order for us to be most effective with our time, in order to help you forecast the next year and make informed recommendations, we would have had access to your records to review beforehand. For your part, come prepared with questions or issues you’d like to discuss, and, of course, bring all your relevant documents, including any 1099, 1099K or 1099 misc. forms.
Contact Ludmila CPA today to schedule an appointment or to discuss any deadlines or requirements that may pertain to your business. Happy tax season!