Tax season can be a stressful time of year for both you, the client, and your dedicated tax professional. This is intended to be a short guide from the Morris & Middleton LLC team on how to handle the tax season efficiently, while avoiding mistakes that can lead to BIG penalties.
Deadlines
The most important thing for all taxpayers and professionals is keeping up with deadlines!! Staying on track will help minimize or reduce penalties in the long run. Here are the most important deadlines of the season:
- January 31st: Deadline to file 1099s for contractors who received more than $600 in payments.
- March 15th: Deadline to file all S-Corp (Form 1120S) and Partnership (Form 1065) returns.
- April 15th: Deadline to file all Personal (Form 1040) and C-Corp (Form 1120) returns.
- May 15th: Deadline to file all Nonprofit Returns (Form 990) for taxpayers on calendar basis.
If you believe that you will not have your documents ready to file on time, please let us know and an extension will be filed. Extensions provide an additional 6 months from the deadline to file the return without penalty. Extensions DO NOT provide additional time to pay any tax that may be owed without penalty. Thus, we urge you to provide us with enough information so that we can calculate a payment for you to make with your extension.
1099s
If you would like for us to file 1099s for your contractors, we will need the following information:
- Your business name and EIN if not using personal name and SSN
- Contractors Name/Business Name
- Contractors SSN/EIN
- Contractors updated address
- Amount paid to each individual contractor
1099s may get rejected for incorrect information. Please submit all information by January 20th to allow time for changes to be made and forms to be mailed out to contractors in a timely manner.
Tax Returns
For new clients, we require a copy of your most recently filed tax return to determine what documents we may need for the upcoming tax year. For existing clients, we use the information that has been provided for the previous tax year.
Though the prior year tax return provides us with a good starting point, there are factors that may change from one year to the next. Some common changes are:
- Changes of employment; Switching from W-2 to 1099; Starting a business
- Changing addresses; Selling residences or rentals
- Change in Marital Status; Additional dependents
- Substantial changes in income that may affect tax planning advice that was previously provided
It is important that you communicate these changes to us because some of them may not be apparent to your tax professional. You also want to communicate any changes that will affect any tax planning to ensure that your tax professional is giving you the most accurate tax advice possible.
Business Taxes
To file, we will need your Profit & Loss Statement for the year, Balance sheet if applicable, as well as a copy of all W-2s paid out from your business, if any.
If you have added any shareholders or partners to your business, we will need their name, SSN/EIN, address, and percentage of profit so that we can provide them with their individual K-1.
For efficiency, please try to have all business books and documents updated no later than the 1st of the month in which the return is due. This will allow you and your tax professional to discuss any changes that may be necessary for a timely filing.
Personal Taxes
Most W-2s and 1099s will be issued to you by January 31st. Please upload all documents as soon as you have them. You do not have to wait until you receive every tax document to begin uploading. We will start your tax return as soon as we get your information, and your tax professional will reach out to you to inquire about any remaining documents.
There are some documents that will not be issued until right before or after the deadline. If you anticipate receiving a document after the deadline, we will file an extension for you. We urge you to still send us all of your other tax documents before filing the extension. We will request an estimate of any income or loss that you expect the delayed document to report so that we can see if a payment will be necessary with your extension.
For efficiency, please try to have all documents uploaded no later than the 1st of the month in which the return is due. This would allow you and your tax professional to discuss any changes that may be necessary for a timely filing.
Leaving the Team
We appreciate your business, and it is a pleasure to service you. However, we understand that there comes a time when we must part ways. If you decide to use another tax service, please let us know immediately so that we can help create a smooth transition for your new tax professional.
Our team spends a lot of time curating our client lists, sending out engagement letters, and generating invoices. Notifying us of your departure allows us to make room for prospective clients. It also prevents our staff from consistently reaching out to clients who have no longer engaged us.
We hope that this finds you well, and we look forward to another year with you.
Happy Tax Season!!