Filing Taxes After the Extension Period 2016

As you are probably aware, the tax code and laws governing filing and payment are very complicated. Often, individuals and businesses opt for a later filing date by requesting an extension from the IRS and the State’s Department of Revenue. Not surprising there are rules to follow and times for filing based on yours or the businesses filing status.

Now that September is in full swing, the “second” tax season is getting underway for individuals and businesses that qualified for an extension.

Businesses that have received a filing extension are required to file based on their classification status as a business.

A business classified as an S Corporation has until March 15th of the new tax year to file for an extension of the previous fiscal year’s tax returns. In order to be approved for an extension, the business must complete the IRS Form 7004.

When is Filing Required for Businesses that Requested an Extension?

September 15, 2016 Deadline

The deadline for the forms listed below are to be filed on or before September 15th.

  • Partnership Returns – Form 1065
  • Trust & Estate Income Tax – Form 1041
  • Corporation Income Tax Returns – Forms 1120 and 1120-S

October 1, 2016 Deadline

Individuals listed as self employed or small employers, if so inclined, must establish a Simple IRA for 2016 by October 1st.

A self employed individual can be:cpa small business raleigh

  • Sole Proprieter – exclusive owner of a business, entitled to all profits and responsible for all losses
  • Independent Contractor – make their own hours and complete work according to their desired schedule
  • Part-time Business – for example: a hobby that has expanded into an income producer

If the individual has earned over $400 net income, then a tax filing is required. The instructions on the Form 1040

October 17, 2016 Deadline

The final deadline for filing individual tax returns for the forms listed below is October 17th.

  • Form 1040
  • Form 1040A
  • Form 1040EZ

What Your Business Should Do to Prepare for Tax Filing

Get the right Forms – Filing the wrong tax form can have drastic implications. Your business will file specific forms based on the type of entity it is classified as. Each classification has a specific set of tax requirements, and submitting the wrong forms could trigger an audit from the IRS.

Take Your Rightful Deductions – Do not be afraid to deduct expenses, your home office and other business related items if they are truly a part of your operation. Failing to take your earned deductions could leave thousands of dollars out of your pocket. Your Raleigh small business accountant can help you determine if there are insurance deductions, the value of your home office and also help you find other cost saving opportunities.

Properly Classify Equipment and Inventory – A commonly misunderstood deduction. Consider inventory as items that can be used and must be replenished, such as office supplies. Equipment are typically major purchases, such as computers, tools, furniture, vehicles, etc.

Accurately Track Expenses – Certain deductions are allowable for reasonable expenses. If you are traveling to visit a client, the trip and any entertainment can be deducted as long as the business was discussed. However, without documentation, the IRS may investigate to ensure you aren’t gaming the system. Keeping a tally on your expenses with an expense log, and maintaining a tax organizer can reduce the stress that an audit from the IRS can bring. By having a solid record keeping system, any questions that may be asked by the IRS can be quickly answered.

Need Help Filing Your 2016 Taxes?

Our small business accounting team in Raleigh, NC knows how to help local businesses maximize their profits, while avoiding an audit from the IRS. Our team has over 26 years experience and have the knowledge your business needs to help it succeed.

Give us a call at 919-420-0092 or complete the contact form to speak with a Raleigh CPA.

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