Category: Tax Deadlines

Tax deadlines are easy to forget. However, missing one could cause to pay up to the IRS for unnecessary penalty fees. Our tax team will keep you informed on the dates that you should mark on your calendar. With our help, you’ll never miss a deadline date again!

If you have questions about specific tax deadlines, then leave us a comment! Our team will give you the answers you need.

Archive for the ‘Tax Deadlines’ Category

How To Get Caught Up on Late Taxes

Posted by admin on February 8, 2024
Last modified: February 12, 2024

Filing late tax returns for past years may seem daunting and impossible, but following a few simple steps can be accomplished with relative ease.

1. Your Income and Expense information

Commence the information-gathering process by assembling all pertinent data from the specific tax year you intend to file a tax return. Consolidate your W-2s, 1099s, and any documentation pertaining to potential tax deductions or tax credits that you may be eligible for. Verify the validity of the tax forms obtained to ensure that you select the appropriate ones for the tax return you are preparing to submit.

2. Request Any Missing Late Tax Documents From the IRS

When it comes to obtaining tax documents from the IRS, some people may need help locating records from previous years. However, a convenient solution is offered by the IRS: a form that allows you to request your tax information for a specific year.

If you are looking for a way to access your tax return information, regardless of whether you have filed your taxes or not, Form 4506-T is the perfect solution for you.

Regarding tax filing, it is important to note that the IRS will provide the information it has on file, which includes details found on various forms like W-2s, 1099s, and 1098s. However, it should be noted that the IRS may need to possess information about potential deductions and credits that you may be eligible for.

late tax

3. Complete and E-file your Late Tax Return

Ensure that you efficiently submit your tax return by completing and filing the necessary paperwork. It is crucial to use the tax forms that correspond to the year in which you are submitting your taxes; for example, if you are filing for the year 2020, make sure to use the appropriate 2020 tax return forms. If you are filing late taxes within the past 3 years, you will likely E-file your back taxes with PriorTax. Our dedicated Tax Professional will file your back taxes with you from start to finish. Also the IRS website offers these essential documents for easy access. Taking your time and exercising patience are vital aspects of completing a tax return manually.

When it comes to completing a tax return manually, having patience is crucial. Fortunately, individuals can also use PriorTax and their Dedicated Tax Professionals team to file tax returns from previous years for free.

To begin the process, simply choose the specific year for which you wish to file your tax return. Afterward, provide your tax details, and PriorTax will effectively complete the necessary forms on your behalf. Please note that for tax returns from previous years, you will need to print and mail them, but this can be much easier by E-Filing with PriorTax.

When you choose PriorTax’s free Dedicated Tax Professionals, a skilled local expert will be assigned to handle your taxes from start to finish, tailored specifically to your individual circumstances. Alternatively, you can opt for unlimited assistance and guidance from our team of tax experts as you navigate the process of doing your taxes with PriorTax, ensuring a comprehensive and seamless experience from beginning to end.

With the assistance of PriorTax, rest assured that you can confidently file your own late taxes and complete them accurately through our step-by-step guidance. Whether you choose to E-file electronically or by mail, we are committed to ensuring 100% accuracy and securing your maximum refund.

Summary

In case you have outstanding late tax obligations from previous years but still need to submit your tax returns, there is a way to minimize penalties and interest.

When it comes to filing your overdue taxes and making the necessary payments, you can unlock a world of benefits for your future. By ensuring that you have a solid record of your late tax returns, you’ll not only be eligible for Social Security retirement and disability benefits but also open the doors to receiving essential Medicare benefits when you require them.

Get Caught Up on Filing Back Taxes or Past Taxes.

Posted by admin on February 8, 2024
Last modified: February 17, 2024

When it comes to getting up to date on your taxes, is it advisable to file back taxes? It is possible that it is still within your reach to file a tax return for a previous year in order to settle your outstanding balance or retrieve any refunds owed to you. Discover more about why one might consider filing back taxes and the steps involved in initiating this procedure.

Should you File Past Taxes or File Back Taxes?

By submitting past-due tax returns, you have the potential to achieve various benefits. These advantages include the ability to request a refund, avoid penalties and interest associated with late filing and payment, obtain tax return documentation for loan applications, and fulfill the necessary requirements to pay Social Security taxes and qualify for benefits.

Get in touch with a free Dedicated Tax Professional to walk you through filing back taxes from start to finish to avoid any additional penalties.

1. Claim a Refund

Filing a previous tax return can serve the practical purpose of uncovering potential tax refunds owed by the IRS. People often have their federal income taxes deducted from their paychecks, but an excessive amount is withheld occasionally. By submitting a tax return, you may be eligible for a refund that boosts your bank balance.

2. Stop Payment Penalties and Interest from Past Tax Filing

To prevent or reduce penalties, submitting your tax return before the deadline is crucial, regardless of your ability to pay the amount owed. Please file to avoid an additional 5% charge for each month your return is overdue for up to a maximum of five months. Please note that there may be minimum penalty thresholds in place.

In the unfortunate event that you cannot pay your taxes owed on time, the IRS imposes an additional penalty. Should you dutifully file your taxes by the deadline yet find yourself unable to pay the total amount owed, a charge of 0.5% will be applied to the unpaid tax for each month (or part thereof)

Until your outstanding balance is completely settled or the penalty reaches a maximum of 25% of your taxes, the accumulation of these fees will persist. Additionally, the IRS imposes interest on unpaid taxes. Unlike penalties, interest continues to accrue even when the failure to tax file and failure to pay penalties from it.

back tax

3. Prepare Tax Returns When Applynig for a Loan

When seeking certain types of loans, like mortgages or business loans, it is essential to provide documentation of your income during the approval process. To streamline the process, ensure your tax returns are filed before making a loan application.

4. Pay Social Security Taxes for Tax Benefit Qualification

Entrepreneurs who work for themselves are required to fulfill their Social Security and Medicare obligations by submitting their individual tax returns. Through this process, you not only declare your earnings but also become eligible for future Social Security retirement, disability benefits, and Medicare assistance.

How Late Is Too Late?

The IRS highly recommends that individuals file any past-due tax returns for any years that still need to be filed. Generally, the IRS expects taxpayers to file their last six years of tax returns in order to maintain a good standing.

Regrettably, there exists a restriction on the length of time in which one can file a tax return to seek tax refunds and credits. The Internal Revenue Service (IRS) enforces a policy that solely permits the claiming of refunds and credits within a three-year timeframe, counting from the initial due date of the tax return.

You must submit your tax return within three years of the deadline to avoid forfeiting a potential tax refund. This means you will no longer be eligible to claim advantageous tax credits or any extra funds withheld from your salary.

Summary

Filing back taxes for previous years is a possibility that should not be overlooked. However, it is important to note that the IRS typically deems individuals compliant if they have filed their tax returns for the last six years.

In accordance with the stipulations set forth by the IRS, individuals are permitted to claim refunds and tax credits solely within a three-year timeframe from the original due date of their tax return.

2024 LLC Business Tax Deadline

Posted by admin on January 25, 2024
Last modified: January 25, 2024

Important Tax Dates for LLC Business in 2024

Small business owners often find limited liability companies (LLCs) to be an attractive business structure. One of the primary advantages of an LLC is the liability protection it offers owners against business debts. Additionally, this business entity allows for flexibility in business tax deadline and tax filing and payment methods.

Due to the adaptable nature of Limited Liability Companies (LLCs), they are not bound by a specific tax deadline. Instead, the timing of their tax filing is influenced by several factors.

How Does LLC File Taxes?

LLCs stand out from other business structures due to their state-level creation. When an individual or group establishes an LLC, their state recognizes the business as a corporation. However, the IRS maintains its classification of a sole proprietorship for businesses owned by one person and a partnership for businesses with multiple owners.

In the realm of business entities, both sole proprietorships and partnerships stand as disregarded or pass-through entities. They earned this status due to their unique characteristic of profits passing through to the owners, who report them on their personal tax returns. The essence lies in the fact that these entities do not incur corporate income tax. LLCs, when classified as either of these entities, can reap the advantages of the protective shield offered by corporations against liability while escaping the burden of double taxation.

Unlike sole proprietorships and partnerships, LLCs are exempt from the burdensome tax filing process. Additionally, they can choose between being classified as an S corporation or a C corporation.

The optimal decision for you is contingent upon various factors. For instance, opting to establish a corporation can lead to financial savings in terms of self-employment taxes but necessitates more rigorous reporting.

If you need clarification on the appropriate filing status for your LLC, seeking the guidance of a CPA or tax expert can help you navigate the decision-making process effectively. By subscribing to a Bench premium membership, you gain unlimited and convenient access to consultations with experienced tax professionals who will guide you on every aspect of your situation.

Main Tax Filing Deadlines for Business Taxes

Regarding tax forms, the designated filing date is the 15th day of each month. However, if this day lands on a weekend or holiday, the deadline is pushed forward to the following business day. Rest assured, the IRS has no intention of shortening the time you have to file your taxes.

The timing of your filing date is also influenced by your choice of a non-traditional fiscal year. Typically, companies utilize the calendar year as their fiscal year, concluding their financial statements on December 31. Adopting the calendar year as your fiscal year can offer certain advantages, such as synchronizing your business taxes with your personal taxes.

Choosing a different fiscal year can prove advantageous for businesses that experience seasonal fluctuations in their operations, such as farms and schools. By aligning their tax season with the conclusion of their busiest period, these entities can reap the benefits of this strategic decision.

Depending on how the IRS categorizes your business, the month you file will vary if you do not opt for a different fiscal year. Your LLC has four distinct filing types, each with its specific deadline.

How PriorTax Can Help

Mastering your tax filing starts with being aware of important tax due dates. However, expecting you to dedicate 10,000 hours to acquire this skill is unrealistic.

From the moment you join forces with PriorTax’s knowledgeable and Dedicated Tax Professionals, your tax obligations will be expertly handled from the beginning to the end of the year. Upon finalizing your financial records, we equip you with a comprehensive year-end financial package, including all the necessary guidance to effortlessly complete your tax filing and secure the maximum tax refund available to you.

business tax deadline

LLC Sole Proprietorship Tax Deadline

In the event that one person owns an LLC, the IRS considers it to be a sole proprietorship. As part of the IRS Form 1040, your individual income tax return, you will report your business income on Schedule C. Consequently, your business taxes will be filed simultaneously with your income taxes.

In order to meet the tax requirements for the year 2023, specifically for filings in 2024, limited liability companies (LLCs)

LLC Partnership Tax Deadline

When multiple individuals own an LLC, the IRS considers it a partnership. As a result, it is necessary to fill out IRS Form 1065, which serves as the partnership return. This form allows you to disclose the business’s income and expenses over the year.

In order to ensure proper financial reporting, the LLC (or the entity that files Form 1065) distributes a document called Schedule K-1 to its shareholders. This document contains all the necessary income and expenses information obtained from the Income and Expenses section of Form 1065. Subsequently, shareholders are responsible for submitting their personal income tax return along with Schedule K-1 and paying any partnership taxes owed.

To comply with the requirements for 2024, it is important for limited liability companies (LLCs) operating as partnerships to submit their Form 1065 by March 15. However, if an extension is granted, the deadline for filing is extended until September 15.

S Corporation Tax Deadline

When your LLC successfully submits Tax Form 2553 within the specified timeframe for the fiscal year you are currently filing; the IRS recognizes your entity as an S corporation. As pass-through entities, S corporations require shareholders to report the business’s profits or losses on their personal income tax return.

When reporting your business’s income and expenses, completing IRS Form 1120S is a must. Just like partnerships, Form 1120S requires the completion of Schedule K-1, which is used to report the income share of each shareholder.

In order to meet the tax obligations for the year 2024, it is necessary for LLCs operating as S corporations to complete and file Form 1120S by March 15. However, if an extension is granted, the deadline for filing is extended to September 15.

C Corporation Tax Deadline

When your LLC makes the decision to be treated as a corporation by submitting Form 8832 (which we will discuss in further detail later), the IRS will classify your business as a C corporation. When it comes to taxation, businesses often encounter the concept of double taxation. This occurs when the business pays a flat corporate federal income tax, and the various shareholders will be taxed on their earnings when reporting their personal income taxes. This results in a duplication of tax payments, leading to the term “double taxation.”

In the world of corporate tax filing, one cannot escape the clutches of IRS Form 1120. This formidable document serves as the vessel through which C corporations submit their income tax returns. Once the taxable income is calculated, it falls under the jurisdiction of a 21% flat federal corporate income tax rate. But that’s not all – the state corporate income tax adds another layer of complexity, with rates varying between 1% to 12%.

In order to ensure compliance with the tax regulations for 2024, it is imperative for Limited Liability Companies (LLCs) that have chosen to file as C corporations to submit their Form 1120 by April 15. With an extension, the deadline for tax filing is Oct. 15.

When Are 2024 Business Tax Filing Due?

Posted by admin on January 25, 2024
Last modified: January 25, 2024

As you embark on your financial journey in 2024, staying vigilant and informed about various deadlines and responsibilities, such as tax filing and maximizing tax deductions, is crucial when business tax filing.

  • Jan. 16, 2024.: Q4 2023 Estimated Tax Payments Due
  • Mar. 15, 2024.: S Corp. and Partnership tax returns due for the tax year 2023
  • Apr. 15, 2024.: Last day for making 2023 contributions to IRAs and HSAs
  • Apr. 15, 2024.: Sole proprietor and C Corp. tax returns due. Q1 2024 estimated taxes are due.
  • June. 17, 2024.: Q2 2024 estimated taxes due
  • July. 31, 2024.: Tax Form 5500 – 401(k) Retirement Plan Filing deadline
  • Sept. 16, 2024.: Extended calendar-year for S-Corp. and Partnership and  tax returns due for 2023. Q3 2024 estimated tax payments due.
  • Oct. 15, 2024.: Extended sole proprietorship and C Corp. tax returns due. Tax Form 5500 – 401(k) Retirement Plan Extended Filing deadline
  • Dec. 16, 2023.: Q4 2024 estimated tax due for C Corp.
  • Jan. 15, 2025.: Q4 2024 estimated tax due for individuals tax payers
  • Updates and Changes for Business Tax Filing in 2024

As the landscape of tax credits and deductions evolves, it is crucial for both seasoned entrepreneurs and those embarking on a new business venture to stay informed. Familiarizing oneself with the latest updates is essential for accurately filing taxes and maximizing potential benefits before the 2024 business tax deadline.

To make informed decisions regarding your business tax filing in 2024, consult with our free and dedicated tax professionals who will guide you from start to finish for maximum tax refund.

2024 Business Tax Filing

What’s New on 2024 Business Tax Return Filing

New tax regulations are constantly being introduced and updated. As we prepare for the 2023 tax year, it’s important to take note of the key changes that will affect your return. These changes encompass a range of areas, including business meals, expanded credits for small employers’ retirement plans, tax incentives for purchasing clean vehicles, credit transferability, adjustments for inflation, the standard mileage rate for business driving, and the small employer’s health insurance credit.

Business Meals Tax Deduction

Starting in the year 2022, the full tax deductibility of business meals was implemented. However, in 2023, only half of the cost can be tax deducted.

More Tax Credits for Small Company Retirement Plans.

Innovation has taken hold in the realm of financial planning as a plan’s origins have broadened. Moreover, a fresh credit has emerged, focusing on specific employer contributions as an alternative to the traditional deduction.

Tax Credits for Buying New Cars.

The world of tax credits offers various benefits to those interested in purchasing plug-in electric and fuel-cell vehicles. These incentives include the new clean vehicle credit, previously owned clean vehicle credit, and the commercial clean vehicle credit. Each of these credits has its own unique set of eligibility rules and credit limits.

Tax Credit Transferability.

The opportunity to exchange green energy tax credits for cash is an enticing possibility. Take, for instance, the alternative fuel refueling property credit case. This tax credit, designed for installing charging stations, can be transformed into immediate cash through the sale to an interested buyer.

Adjustments for Inflation in 2024 Business Tax Return Filing

Every year, the IRS makes numerous adjustments to various tax items to accommodate inflation. These adjustments significantly impact individuals’ tax brackets, specifically affecting the amount pass-through entity owners must pay on their share of business income. Additionally, cost-of-living adjustments (COLAs) have an influence on several other aspects relevant to businesses. These include the standard mileage rate for business driving, the small employer’s health insurance credit, the gross receipts test, the Sec. 179 tax deductions (first-year expensing), the limitation on losses for non-corporate taxpayers, and the qualified business income (QBI) tax deduction.

Standard Mileage Rate from Driving for Business

Regarding business driving, the standard mileage rate plays a crucial role. It is worth noting that if one doesn’t deduct the actual expenses, the IRS-set rate for the year 2023 stands at 67¢ per mile.

Small Employer’s Health Insurance Tax credit.

In 2023, the adjusted amount for the Small employer’s health insurance credit, which is partly determined by wages, is now available.

Gross Receipts Test.

The eligibility assessment, commonly known as the gross receipts test, is pivotal in various aspects of a business’s financial operations. It determines the suitability of utilizing the cash method of accounting, the need for inventory accounting, and other specific purposes.

Limitation on Losses for Non-Corporate Taxpayers. 

The current year’s restriction on losses for non-corporate taxpayers has been raised, allowing excess losses to accumulate as part of a net operating loss for utilization in future years.

Qualified Business Income (QBI) Tax Deduction. 

With the start of 2023, a significant increase in the taxable income threshold could limit or prohibit the Qualified Business Income (QBI) deduction.

Sec. 179 Tax Deductions (first-year expenses).

The option of immediately deducting the cost of machinery, equipment, and other eligible property placed in service before the end of 2023 instead of gradually depreciating it is referred to as the Sec. 179 deduction or first-year expense. This tax deduction allows businesses to tax deduct up to the 2023 limit of $1,160,000.

Small Business Tax Deadlines for 2024

Posted by admin on January 18, 2024
Last modified: January 18, 2024

Unlike the average American who only has to worry about tax deadlines once a year, business owners have a constant burden of filing tax forms regularly. Whether quarterly income taxes or keeping up with payroll taxes, there are always business tax deadlines to meet and obligations to fulfill.

In the upcoming year of 2024, small businesses will face a variety of important business tax deadlines that require their attention. To ensure a smooth process, it is recommended for small business owners to collaborate with a financial advisor who specializes in tax automation solutions.

Small Business Estimated Tax Deadlines

For anyone generating income through self-employment or freelancing, the responsibility of tax filing estimated income taxes is paramount. Often referred to as “quarterlies,” these tax filings are lodged approximately every quarter.

There are multiple reasons why the IRS mandates this. Its primary motive is to maintain a consistent flow of income for the agency. By implementing estimated taxes, the IRS ensures a steady influx of funds throughout the year instead of relying solely on a single annual collection.

With quarterly payments, there is an increased likelihood for businesses and individuals to have readily available funds. It is common for small businesses to neglect setting aside enough money for taxes, causing difficulties for the IRS when collecting a lump sum at the end of the year.

The amount of income tax you owe is calculated based on your income since your previous estimated payment, which is typically made every three months.

Instead of performing an exhaustive evaluation of your income, deductions, and expenses to determine your present tax bracket accurately, there is an alternative option. By applying the tax bracket from the previous year to the income earned in the last quarter, you can make an “estimated” tax payment. The IRS allows this simplified calculation method, making it possible to estimate your tax liability quickly and conveniently.

In 2024, you must prepare the quarterly tax filing on these dates:

  • Q1, Jan. – Mar.: Due Apr. 15, 2024
  • Q2, Apr. – May: Due June 17, 2024
  • Q3, June – Aug.: Due Sept. 16, 2024
  • Q4, Sep. – Dec.: Due Jan. 15, 2025
business tax deadlines

Small Business Income Tax Deadlines

Similar to people, companies are also required to submit their income tax returns annually. The specific due dates for filing these taxes vary depending on your business type. However, adhering to the business tax deadlines for submitting your taxes or applying for an extension is crucial.

  • Partnerships, LLCs and S Corporations Using A Calendar Year: Due Mar. 15, 2024
  • C Corporations and Sole Proprietors Using A Calendar Year: Due Apr. 15, 2024
  • The IRS has scheduled Tax Day for Monday, Apr. 15, 2024.

Please be aware that corporations utilizing a fiscal year system are exempt from these time constraints. If you employ fiscal year accounting, you must submit your tax returns by the 15th day of April following the conclusion of your fiscal year, taking into account any potential holidays or weekends.

There are two important rules to remember regarding tax filing deadlines the IRS sets. Firstly, if you choose to file electronically, your submission will be considered on time as long as you manage to submit your forms by midnight in your local time zone on the day it is due. Secondly, if you opt for hard copy submissions, your forms must be postmarked by the due date to be considered on time.

Small Business Tax Form Deadlines

To successfully run a business, it is essential to maintain regular communication with the IRS. This ensures that both your finances and the financial well-being of your employees are properly accounted for. Although we won’t delve into the exhaustive details of monthly payroll tax filings, it is important to consult the comprehensive tax calendar provided by the IRS for a thorough understanding of the process.

However, the important unique business tax deadlines you need to know are

  • Employees Must Receive W-2 Tax Forms: Jan. 31, 2024
  • Independent Contractors Must Receive 1099 Tax Forms: Jan. 31, 2024
  • Switch Business Election to S-Corporation for 2024 Taxes: Mar. 15, 2024
  • File Business Taxes After An Extension, Partnerships, LLCs, and S Corporations Using A Calendar Year: Sept. 15, 2024
  • File Business Taxes After An Extension, C Corporations and Sole Proprietors Using A Calendar Year: Oct. 15, 2024

It is important to keep in mind a few key factors. Initially, it is crucial to note that the business tax deadline for employed or contracted individuals differs from the majority of deadlines imposed by the IRS. In this situation, the documents must be obtained by Jan. 31, whether in electronic format or as a physical copy.

To begin with, although a tax extension provides an additional half a year to complete your necessary documentation, it remains essential to submit an estimated tax payment either in March or April (depending on the specifics of your organization). Pay an estimated amount considerably lower than your final tax liability to avoid the IRS imposing penalties for underpayment.

Small Business Payroll Tax Deadlines

When running a business that employs people, one responsibility that cannot be overlooked is managing payroll tax filings and payments. You must ensure that your employees’ payroll taxes and income tax withholdings are paid promptly and regularly. The frequency of these payments, whether on a monthly or biweekly basis, will depend on the specific nature of your company.

Apart from fulfilling these obligations, it is imperative to submit a payroll tax form to the IRS consistently. Although a handful of tiny enterprises may accomplish this by submitting Form 944 along with their yearly reports, most businesses will be responsible for their payroll tax filings every quarter through the submission of Form 941.

If the documentation reveals any outstanding taxes that surpass the pre-existing deposits, the corresponding payments will become payable one month after the submission.

These business tax deadlines are:

  • Q1, Jan. – Mar.: Filing Due Mar. 31, 2024; Payment Due Apr. 30, 2024
  • Q2, Apr. – June: Filing Due June. 30, 2024; Payment Due July. 31, 2024
  • Q3, July – Sept.: Filing Due Sept. 30, 2024; Payment Due Oct. 31, 2024
  • Q4, Oct. – Dec.: Filing Due Dec. 31, 2024; Payment Due Jan. 31, 2025

Tips for Small Business Tax Fling

Navigating the small business world inevitably leads to numerous encounters with the IRS. Whether managing payroll taxes or staying on top of estimated quarterly payments, it’s crucial to remain vigilant about your small business tax deadlines to avoid potential penalties or fees.

If you cannot meet certain business tax deadlines, you may find yourself in a position to dismantle your business’s legal structure. To avoid this outcome, consider locating your dedicated tax professional from PriorTax who can effectively handle these business tax deadlines on your behalf.

Start your journey towards a stress-free tax season by finding the free dedicated Tax Professional to assist you with your business taxes and filing needs. From the very beginning to the very end, PriorTax is here to ensure you are matched with the ideal dedicated tax professional, completely free of charge. Reach out now, and let’s start making your tax experience a breeze.

2024 Tax Filing Will Open on January 29

Posted by admin on January 11, 2024
Last modified: January 9, 2024

In a recent announcement, the IRS has declared that the 2023 tax season will commence on Monday, January 29, 2024. Get ahead of the game and e-file your taxes now with PriorTax. By 2024 tax filing early, you can ensure you’ll be among the first to receive your tax refund.

If you are in need of assistance with your taxes, whether you prefer to tackle them independently, seek support throughout the process, or entrust them entirely to a tax specialist, the team at PriorTax is committed to providing expert guidance at no cost to you. Our dedicated Tax Professional aim to ensure you receive the maximum tax refund possible while offering comprehensive support from beginning to end. Individuals received an average tax refund exceeding $3,000 in the previous fiscal year.

2024 Tax Filing

2024 Tax Filing Deadline is April 15 for Most Taxpayers

On April 15, we celebrate Patriots Day, a great significance for our nation. It is a time when we honor and remember the brave patriots who fought for our freedom and independence.  In order to ensure a smooth and timely tax filing process, the we strongly advise the taxpayers to submit their tax returns as early as possible. Maintaining copies of previous tax returns for a minimum of three years is also important. For most taxpayers, the essential deadline to file their individual federal tax returns, settle any outstanding tax liabilities, or seek an extension is Monday, April 15, 2024.

April 15, 2024, marks the final day for individuals to submit their 2023 tax returns. However, residents of Maine and Massachusetts can breathe a sigh of relief as they have an extended deadline until April 17, 2024. This extension is granted in recognition of the significant holidays of Patriot’s Day and Emancipation Day. Furthermore, taxpayers residing in areas that have been declared as federally recognized disaster zones may be eligible for additional time to file their tax returns.

When tax filing your taxes electronically, e-file and direct deposit are the perfect combination for a speedy tax refund. The IRS estimates that approximately 90% of taxpayers will receive their tax refund within 21 days or less as long as there are no complications with their tax return.

Tax refunds are typically processed and issued by the IRS within 21 days, with EITC refunds becoming available starting February 27. However, the timeline for receiving a refund can be influenced by various factors once the IRS receives a tax return. It is important for taxpayers to refrain from depending on a specific refund date, particularly when it comes to significant expenses or bill payments.

Important 2024 Tax Filing Season Dates

Jan. 12: IRS Tax Filing opens

Jan. 16: Due date for 2023 fourth quarter estimated tax payments.

Jan. 26: Earned Income Tax Credit Awareness Day.

Jan. 29: The filing season starts for individual tax returns.

April 15: Due date of filing a tax return or requesting a tax filing extension.

April 17: Due date for Maine and Massachusetts.

Oct. 15: Due date for extension filers.

Finding your dedicated tax professional is the most effective way to track the status of any potentially delayed returns. In some instances, additional review may be necessary, resulting in a longer wait time.

2024 Tax Guide for Unemployed Income Tax Filing

Posted by admin on December 28, 2023
Last modified: December 28, 2023

In times of employment uncertainty, facing the challenges alone can feel daunting. However, you can use our expertise and guidance to navigate this journey. Our dedicated team of free Tax Professionals is ready to provide free assistance and valuable insights on various aspects, ranging from financial management to tax implications. Discover a wealth of tax filing related information on unemployment income tax and unemployment benefits, insurance, and eligibility through PriorTax. You do not have to face unemployment alone; we are here to support you every step of the way.

Currently, the state of unemployment in the United States remains stagnant, with approximately 6.3 million individuals facing joblessness and the national unemployment rate standing at 3.7 percent, primarily due to layoffs or temporary work suspensions. Despite the passage of time since the beginning of 2022, these statistics have yet to make minimal progress, leaving a significant portion of the American population grappling with financial difficulties.

For those who find themselves in the position of receiving unemployment benefits, it’s only natural to have questions regarding the tax consequences that come along with it. To shed some light on the matter, here is some essential information you should be aware of.

How to Calcaulate Tax on Unemployment Income

Unemployment income is often subject to taxation and must be reported as part of your annual income, particularly if you have additional sources of income. Certain states may also consider unemployment benefits as taxable earnings.
When the tax filing season arrives, individuals will be provided with Form 1099-G, displaying the total sum of their unemployment benefits. This crucial document also reveals any federal taxes that were tax deducted from their unemployment compensation.

unemployment income tax

Tax Guides on Unemployment Income

Tax Deduct Federal Taxes.

To ensure a smooth tax filing experience, opt for having federal tax deducted from your unemployment income. By doing so, you can avoid any unexpected surprises when the time comes to tax file your taxes on your unemployment income.

By completing a Form W-4V Voluntary Withholding Request and submitting it to the benefits disbursing agency, taxpayers can withhold a maximum of 10% from their unemployment benefits. In the scenario where voluntary tax withholding is not selected, or the amount withheld is insufficient, taxpayers still have the alternative of making estimated tax payments.

Adjust your withholdings.

When it comes to securing employment, it is crucial to consider your unemployment benefits as you complete the W-4 withholding certificate for your employer. This becomes particularly significant if you still need to deduct federal taxes from your unemployment income.

When paying estimated taxes for Self-Employed have Unemployment into Account

When it comes to individuals working as independent contractors, engaging in side gigs, or operating as freelancers, it is important to remember that any unemployment income received will be combined with your self-employment net income and may be subject to taxation. As you prepare to fulfill your obligations regarding estimated quarterly taxes, it is worth considering the inclusion of your unemployment income, especially if you have yet to have federal taxes withheld from those specific earnings.

New tax credits and new tax deductions in 2024.

Discover the potential benefits of recently discovered new tax credits and new tax deductions. Some tax credits and tax deductions are specifically tied to income, and you may not have been able to take advantage of them previously because of your higher income. However, now you may be eligible for these benefits. Two noteworthy examples include the Earned Income Tax Credit and The Saver’s Credit. Surprisingly, according to the IRS, a significant portion of individuals, approximately 20 percent, overlook both of these advantageous tax credits.

Earned Income Tax Credit

In the realm of tax benefits, the Earned Income Tax Credit stands tall as a significant tax credit that is calculated based on an individual’s income. Should an individual experience a decrease in their income during the year 2023 due to the unfortunate circumstance of lost wages, they may find themselves eligible for the EITC.

Saver’s Tax Credit

Introducing the Retirement Rewards Tax Credit, a lucrative opportunity for all those who have diligently invested in their future. In light of the unprecedented financial setbacks experienced in 2023, individuals who find themselves within the designated income limits due to unexpected wage reductions may now reap the benefits of the Retirement Rewards Tax Credit.

Child and Dependent Care Tax Credit

The possibility of claiming the Child and Dependent Care Tax Credit arises when an individual hires someone to provide care for their child while they are employed or actively seeking employment. This particular tax credit becomes more relevant for those with a lower income.

In the upcoming year of 2023, a valuable tax credit is being offered which is nonrefundable. This tax credit allows individuals to claim up to 35% of their expenses for various dependent situations.

Rest assured, our expert team of PriorTax Tax Professionals is here to guide you when it comes to understanding the intricacies of tax regulations. By asking a series of straightforward questions tailored to your unique circumstances, we will determine the specific tax deductions and tax credits available to you.

2024 New Tax Brackets

Posted by admin on November 16, 2023
Last modified: December 21, 2023

Significant Changes for 2024 New Tax Brackets.

The Internal Revenue Service has taken steps to ensure that the new 2024 tax brackets reflect the current consumer price index. This 5.4% upward adjustment is especially notable compared to the 7% increase from last year, one of the most considerable adjustments the IRS has made in recent years. The new limits for 2024 will be set according to this formula and should accurately account for inflation developments in our current economy.

In anticipation of 2024, taxpayers should be aware of new income limits for IRS tax brackets. To account for inflation, these thresholds have been adjusted from previous years, which may provide a much-needed financial break to those filing taxes in 2024. Here’s how to keep up with your bracket.

Year after year, taxpayers are affected by changes to tax brackets and other areas, such as retirement fund contribution limits due to inflation. This variation helps prevent so-called “bracket creep,” which is when a person’s earnings puts them in a higher income tax bracket while their basic standard of living remains unchanged. To combat this situation, annual adjustments are made by the Internal Revenue Service (IRS).

Taxpayers may benefit from the higher thresholds, as more of their taxable income will likely fall into a lower tax bracket. Therefore, these earners can get some respite from taxes when filing their 2024 taxes in early 2025.

New Tax brackets for the 2023 tax year, taxes which are due in 2024

2024 tax filing

The New 2024 Tax Brackets

For tax year 2024, U.S. taxpayers can expect an uptick in their federal income taxes. With seven rates set by the 2017 Tax Cuts and Job Act, people filing either individually or as married couples will see a 5.4% increase in their brackets across each of these bands: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

The New 2024 Tax Brackets for married couples filing jointly

Filing jointly as a married couple in the United States has distinct tax consequences; depending on one’s taxable income, various rates apply. For instance, any income up to $23,200 would be taxed at 10%, while any above $731,200 would see the highest rate of 37%.

When it comes to taxes in the United States, there often needs to be more understanding about how they are calculated. Contrary to popular belief, the highest tax rate an individual may be subject to isn’t applied to every dollar of their income. Instead, progressive tax rates are used, which means that each tax bracket a person falls under will have its applicable rate.

For the 2024 new tax bracket, the federal government has shifted some of taxpayers’ income into lower tax brackets. For instance, single filers with taxable income up to $11,600 will pay 10% in taxes that year – a full $600 more than they would have paid in 2023 when the same bracket was limited to the first $11,000.

2024 New Tax Brackets for Single Filers

In order to keep up with inflation, U.S. tax law dictates that income limits for each bracket must increase annually. As of this year, those limits have gone up by 5.4%.

The marginal rate is the maximum taxation that you are liable for. However what counts is the effective tax rate, which encompasses all of the taxes imposed on different parts of one’s income. Essentially, this amount reflects a person’s actual rate of taxation.

The new 2024 tax brackets for head-of-household filers

For head-of-household filers, their 2024 tax brackets have been established. Individuals filing taxes as a head of household will face a 10% rate on their first $16,550 taxable income. Any income above that threshold will be taxed at 37%, beginning at $609,350.

2024 New Tax Standard Deduction

As of 2024, taxpayers will see an increase in their standard deduction, according to a report from IRS. Specifically, married couples filing jointly will see an extra $1,500 – bringing their total up to $29,200. This is a boost of 5.4%.

For the upcoming tax season, taxpayers who are unmarried and filing separately will receive a standard deduction of $14,600 – an improvement of $750 from last year. Meanwhile, heads of households can count on a boost in their standard deduction to $21,900 – up by $1,100 compared to 2019 taxes.

How to Determine Your New 2024 Tax Bracket

When it comes to taxation, understanding your marginal tax bracket is crucial. You’ll need to calculate your highest taxable income as accurately as possible to do this.

Consider a married couple bringing in an annual gross income of $150,000. After subtracting the 2024 standard deduction, they are left with taxable income worth $120,800. Therefore, the marginal tax rate applicable to them would be 22%.

However, their effective tax rate is much lower:

When it comes to taxes, individuals get a break when it pertains to their first $23,200 of income. While their effective tax rate is significantly lower than average, people who make between $23,200 and $94,300 will still be expected to pay 12%, amassing a total of $8,532 in taxes. Those with incomes ranging from $94,300 to $120,800 would be lucky enough to enjoy a much lower effective tax rate. For this bracket, taxes amount to 22%, which adds up to $5,830. Together, their federal income taxes would come to $16,682 – an effective rate of 14%.

Higher FSA, HSA Limits in 2024

In an effort to help taxpayers cover medical expenses, new regulations have been issued by the IRS, increasing limits for tax-advantaged accounts. Such accounts provide people with financial assistance when paying for related costs.

The Internal Revenue Service announced that in 2024, the limit for Flexible Spending Accounts (FSAs) will be increased to $3,200 from the current level of $3,050. These accounts allow individuals to set aside pre-tax dollars, which can then be used to pay for short-term health care expenses.

IRS recently announced modified limits for contributions to Health Savings Accounts (HSAs) for those with a high-deductible health care plan. Single taxpayers will be able to contribute up to $4,150 in 2024 – an increase of 7.8% from present limits. Similarly, families now have a contribution limit of $8,300 – a rise of 7.1%.

Individuals aged 55 and over can add an extra $1,000 to their health savings accounts (HSAs), a figure that remains unchanged from the previous year.

11 Strategies to Lower Your Tax Bill

Posted by admin on November 2, 2023
Last modified: November 6, 2023

It is no secret that nobody wants to end up with an unpredicted tax bill. To help make sure that doesn’t happen, here are 11 tactics you can use to reduce your overall tax burden throughout 2023. While utilizing some of these 11 strategies may necessitate itemizing tax deductions instead of taking the standard tax deduction, it could be well worth it to lower your tax.

In addition to tax deductions and tax credits, other means of tax optimization can be particularly advantageous to lower your tax. These approaches have become increasingly popular in recent times, so let’s look at some of them.

Also a Dedicated Tax Professional can walk you through your tax filing from start to finish for free.

1. Re-evaluate and Slight Adjustments to Your W-4

Adjust your W-4 before it’s too late. This form is critical, as it tells your employer how much tax to deduct from every paycheck. This year, you may have been surprised by a large tax bill. However, you can take steps to ensure that doesn’t happen again. Increase your tax withholding amount so when it comes time to file taxes, the refund or payment due is lower than it would have been. In comparison, those who got a sizable refund should reduce their withholding as they could be living on less of their paycheck throughout the year otherwise. You can adjust your W-4 at any given moment.

2. Maximize Your 401(k)

You can use 401(k)s to lower your tax bills. Contributions to a 401(k) made directly from your paycheck are not taxable by the IRS. By 2023, you can contribute up to $22,500 annually to one of these accounts. This provides a significant tax savings opportunity for individuals.

Regardless of your age, the idea of contributing to a retirement fund is something worth considering. For those 50 or older in 2023, you can contribute an additional $7,500. 401(k)s are the most common type of retirement accounts sponsored by employers, and even self-employed people can open their own.

lower your tax

3. Options from the IRA

When planning for retirement, two primary options are Roth IRAs and traditional IRAs. Depending upon one’s income level and whether they or their spouse have a retirement plan at work, contributions to a traditional IRA may be eligible for a tax deduction.

In the 2023 tax year, those who are married and filing jointly may be unable to deduct their contributions to a retirement plan at work should their modified adjusted gross income exceed $136,000. It should be noted that this is only applicable in cases where a retirement plan covers the taxpayer through employment.

Contribution limits for an IRA in 2023 are set at either $6,500 annually or $7,500 for individuals 50 or older. Although the calendar year has already begun, you still have until the tax filing deadline to make contributions from the prior year’s income.

4. Save Up for College Ahead

Parents eager to save for their child’s tuition may be able to receive a tax break. A popular choice is the 529 plan, an educational savings account operated by a state or educational institution. While contributions are not deductible on federal taxes, some states may allow for deductions when contributing to their 529 plans. It’s important to be mindful of the gift tax limit, which currently stands at $17,000 per beneficiary in 2023 and beyond.

5. For the Employers, Use the FSA 

Taking advantage of a flexible spending account can be a great way to save on taxes. Your employer may offer an FSA, and every year, you can deposit up to $3,050 in pre-tax dollars from your paycheck into this account. This can be a smart move when it comes to lowering your tax bill.

The money allocated each year for medical and dental expenses can be used to purchase items such as first aid, bandages, breast pumps, pregnancy test kits, and acupuncture related to healthcare. These goods apply not only to yourself but also to your designated dependents. Employers may enable the funds to roll over into the following year.

6. Use your Dependent Care FSA Account

A great way to pay less taxes in 2023 is by using a Dependent Care FSA Account. Employers often offer these unique FSAs, and the IRS will not include up to $5,000 of your salary when it is diverted into one of these accounts. You can then exclude this from paying taxes on that total amount.

For parents of young children, there may be significant advantages to their employers’ benefit plans. Usually, allowable uses are daycare, before- and after-school care, preschool and day camps. It is possible elder care could be included as well. However, it is important to review the documents pertaining to your plan for complete information about what is covered.

7. Maximize Your HSA

For those with high-deductible health care plans, one way to reduce taxes is to open a health savings account. Money put into an HSA is exempt from taxes when deposited and tax-free when used for qualified medical expenses.

In 2023, individuals who have self-only high-deductible health coverage can contribute to tax deduction up to $3,850 to their Health Savings Account (HSA). Families with the same type of cover can invest up to $7,750. Folks aged 55 and higher are entitled to an additional contribution allowance of $1,000. Establishing an HSA is possible through your workplace or other banking institutions.

8. Explore if you Qualitfy for the EITC

Do you believe your earnings in 2023 will amount to less than $63,398? In this case, it could be a great idea to investigate whether you’re eligible for an Earned Income Tax Credit(EITC). This valuable tax break could potentially offer credits of up to almost $7,500 depending on your financial status (marital and children)

Rather than simply reducing how much of your income is subject to taxation, as with tax deductions, getting tax credits can be even more beneficial by providing real savings. In fact, should the credit result in your total tax bill coming to less than zero, it’s possible for the IRS to refund some or all of the money back to you.

9. Charity and Donations

People can get a tax deduction for contributions to charity, and these don’t even have to be in the form of money. Items such as clothes, food, sports equipment, or other household goods that have been given away are all valid items to deduct from taxes – as long as you get a receipt from a legitimate organization.

As you prepare to do your taxes in 2023, consider itemizing your deductions. Doing so can allow you to receive a charitable contribution tax deduction of up to 60% of your adjusted gross income. To make sure that all donations are accounted for correctly, create an itemized list of any items donated prior to dropping them off at places like Goodwill. With the help of tax software programs, these donations could potentially add up to substantial deductions.

10. Collect and File Your Qalitifed Medical Expenses

It’s important to keep documents related to hospital stays or costly medical or dental care for the 2023 tax year. But to lower your tax bills, know that your medical expenses that are qualified which exceed 7.5% of your adjusted gross income can be tax deducted from that year’s taxes.

Thus, your adjusted gross income is $40,000. In that case, above $3,000 of your medical costs – representing 7.5% of your AGI – may be deductible. Suppose you had $10,000 in medical bills; then you could claim deductions on the sum of $7,000.

11. Prepare and File in a Timely Manner

By the end of the year, there can be a dramatic difference in tax implications depending on when you make certain purchases. Therefore, it is wise to analyze whether an expense can be paid before December 31st instead of waiting until January for increased tax benefits. To illustrate this concept, consider how making your mortgage payment at the end of the year could provide additional interest deductions compared to when it would have been processed in January.

Regarding tax season, one should be conscious of being close to the medical-expense deduction threshold.

Basic Tax Planning with 5 Tax Strategies & Tax Filing Approaches

Posted by admin on October 26, 2023
Last modified: October 30, 2023

Fundamental 5 Tax Strategies & Tax Filing Concepts to an effective Tax Planning and Filing, such as being aware of your taxable bracket, understanding the basics of taxation, maintaining necessary documents, etc., are all essential for effective planning.

Maximizing the potential for financial advantage while obeying laws is the objective of effective taxation planning. By analyzing and arranging a person’s fiscal position, it is possible to minimize liabilities and maximize deductions efficiently.

Filing taxes can be a daunting task, yet getting familiar with the relevant rules has its rewards. Understanding some of the major principles involved in taxation planning and strategy may help you lessen your financial burden once it’s time to file. Here are some points to consider before making any significant monetary decisions.

tax planning

Tax Planning 1. Tax Deductions VS. Tax Credits

When filing your taxes, you may be delighted to learn about the deduction and credit options available. Both can reduce the money owed in taxes, though they function differently. By understanding the distinction between them, it is possible to develop a great plan to lessen your overall burden.

When filing taxes, taxpayers have the opportunity to deduct certain expenditures. These deductions are subtracted from your total taxable income, reducing the amount you will pay in taxes.

In comparison to deductions, which are subtracted from your taxable income, a much more valuable benefit is a reduction in the actual amount of taxes you owe.

Tax Planning 2. Stay Up To Date on Any New Tax Deductions and Tax Credits

It is critical to remain aware of the numerous tax deductions and credits that are available. In total, there are several hundred options, so it’s essential to make sure you qualify for the ones you plan on claiming.

Tax Planning 3. Know Which Tax Bracket you Fall Into

It’s only possible to make plans for the future by understanding your current tax situation. As such, the first advice is to determine which federal tax bracket applies to your case.

There are good reasons why. Once your total income is calculated, tax deductions are subtracted to determine your taxable income. Consequently, the amount of your salary or overall earnings may not always equal your taxable income. Instead of simply calculating taxes by multiplying your tax bracket by your taxable income, the government takes a different approach. They split your taxable income into sections and apply the applicable rate to each section.

In contrast to a flat tax system, taxpayers in America face a progressive taxation system. This means those who make more pay taxes at higher rates, while those who earn less are subject to lower tax rates.
For the upcoming 2023 tax year in April, 2024, income is split up into seven distinct brackets. The rates range from 10% to 37% in increments of two and four percentage points.

Tax Planning 4. Standard Tax Deduction VS. Itemizing Tax Deduction

Standard Deduction

Regarding tax planning, one of the most important decisions you must make is whether to itemize your deductions or simply take the standard deduction. This choice can have huge implications for how much you owe in taxes.

The standard deduction is a way to make filing taxes easier and faster. This no-questions-asked tax break is a flat amount that many taxpayers take instead of itemizing deductions to simplify the process. In essence, it is a fast and straightforward option for reducing one’s taxable income.
Each year, the amount of the standard deduction is set by the United States legislative branch, and it is usually adjusted to account for inflation. Whether you are filing singly or jointly, your eligibility for the standard deduction varies; you can see in which bracket you fall concerning this particular tax benefit through the table below.

Itemize

Do you know why itemizing your taxes is important? By itemizing, rather than opting for the standard deduction, you can maximize your deductions on a tax return.

When tax planning, individuals should monitor their deductions throughout the year in order to determine whether itemizing is the best option. Usually, this choice hinges on whether the sum of their itemized deductions exceeds the standard deduction. Although itemizing can save money, it requires more effort and documentation than standard deductions. You must prove that you are eligible for any deductions taken when itemizing your taxes.

IRS Schedule A

When filing your taxes, Schedule A is the form used to list all itemized deductions. For those who own a home, there are advantages to itemizing that could result in more savings than the standard deduction would offer. Homeowners have access to tax deductions for mortgage interest and property taxes, which can quickly amount to more than what the standard deduction can provide.

For those who take the standard deduction on their federal tax returns, itemizing deductions for your state return may be worth considering. Fortunately, PriorTax provides Dedicated Tax Professionals for free with the ability to identify which tax deductions can be included and how their total amount compares to the standard deduction.

Tax Planning 5. Maintaining Prior Year Tax Records

When it comes to taxes, having records on hand is essential. Your tax return and the accompanying documentation should be kept secure in case of an audit. This is why it’s important to understand which documents are necessary for your taxation needs.

It is advisable to hang onto your records for at least three years due to the IRS’s time limit to carry out an audit on your return. Additionally, should you submit a claim for a tax credit or refund after filing your original return, those documents should also be kept for the same amount of time.

In certain situations, you may be required to maintain documents for an extended time, from six years to indefinitely. This is due to the Internal Revenue Service (IRS) having a longer limit on their auditing timeline in these cases. For example, the agency has up to six years when there was more than 25% income underreporting or seven years for writing off losses from worthless security. Furthermore, the IRS can audit indefinitely should they discover tax fraud or non-filing of any returns.