This year’s tax season scramble is on for business opportunity, franchise and other small business owners as well as everyone else! Once again, it’s time to recount all of your profits and losses, this time for 2012, so you can report them to Uncle Sam. Oh yippee!?
While few of us relish the task, it’s always a lot easier when we have answers to even the simplest of questions. So, here it is…your go-to guide for quick answers to some of the most frequently asked questions this time of year. And, no, especially when it comes to taxes, there is no such thing as a dumb question...
What are the key dates for tax returns 2013?
This tax calendar year pretty much meets the standard in that April 15, 2013, aka Tax Day, falls on a regular business day. This year, it’s on a Monday, so midnight on that date, on that day, is the deadline for the vast majority of individuals and businesses to either file their federal taxes or request an extension.
2012 state tax returns and extension requests, although more often than not in alignment with federal requirements, can vary, so it’s important to check your individual state’s tax agency website for exact tax return and extension deadlines.
Here’s a rundown of the tax return deadlines and other helpful information by business type:
Sole Proprietorship or Single-Member Limited Liability Company (LLC)—As a sole proprietor, you are your business and, from the Internal Revenue Service’s (IRS) perspective, your business is therefore not a federally taxable entity unto itself, so tax return deadlines for you are both personal and professional. Single-Member LLCs are taxed just like sole proprietorships. The tax calendar year ended as of midnight on December 31, 2012, so April 15, 2013, is both the individual tax return due date and the business due date in both scenarios.
General Partnership or Multiple-Member LLC—The partnership tax return due date as well as the Multi-Member LLC due date is Monday, April 15, 2013, and is filed as an information return on Form 1065. Because the business owners in a partnership are considered legally the same as their business, partnerships also are not taxable under federal law. Rather, income from the partnership is taxed to the individual partners (two or more) at their own individual rates, and all of the partnership’s income must be “passed through” to the partners, who are then taxed on their own returns, which are also due on April 15, 2013.
Corporations—Corporations (or C-corps) that have not filed for a Subchapter S may choose a convenient fiscal year-end date, which usually coincides with one of the year’s four quarters. Tax returns are then due and taxes payable by the 15th day of the third month after that date. For those that have filed for Subchapter S, they are treated by the IRS like a partnership or LLC for tax purposes and are taxed on individual income tax returns as a result. Therefore, barring special and approved exception, they also must file by April 15 of this year.
What is this year’s federal tax return extension deadline and what does that mean exactly?
If you know you can’t pay what you owe the IRS by April 15, you can request a tax extension. While the extension will grant you more time to file your tax return, it does NOT give you more time to pay what you owe. Rather, if you end up owing something to the IRS once your tax return is complete, you will incur financial penalty. If you don’t owe anything and are expecting a refund, then you may not even need to file an extension. IRS penalties are based on what you owe, so the only downside to being late in filing in this case is that your refund more than likely will be delayed.
Tax extension requests are due when taxes are due on or before April 15 at the latest. An extension gives you six additional months in which to file.
What if this is the first-year tax return for my business?
If you started your business just this year, chances are that you didn’t start it exactly on January 1 when this year’s tax calendar year began. Even if you just started your business in November of December of 2012, you still are required to file a tax return accounting for the time you were in existence or an extension request, if necessary, by close of business (COB) on April 15, 2013.
What happens if my business was affected by a disaster this year?
For residents in areas affected by natural or other federally recognized disasters, extended tax filing and payment deadlines may be granted. More information is available by clicking here on Tax Relief in Disaster Situations.
What happens if I file my federal taxes late and I don’t have an extension?
If you owe federal taxes for 2012, and you do not get an extension, filing penalties will apply and likely be more severe. If you know you probably owe taxes this year, and you also know you can’t pay them, it is still better to file than not, as you can explore alternative IRS payment options once you do. If you are expecting a refund and filing late, there is no real penalty other than your refund being held up.
And don’t forget…
It’s not just your taxes for the year 2012 that are due April 15! You’re also responsible for paying your first-quarter estimated payment for the 2013 tax calendar year by COB as well.
To access the IRS’ quick reference month-to-month calendar of Important Tax Dates for Small Businesses, click on it now! And for more information on 2012 tax filing of all kinds, go to http://www.irs.gov/Filing.
How about you? Are you ready for tax season? Any tips you’d like to share for making the process easier or less confusing? We want to hear from you…