Category: Taxes

5 Reasons Why Bookkeeping is an Important First Step in Settling Your Tax Debt

Post author By peakreliance
Post date December 17, 2022
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5 Reasons Why Bookkeeping is an Important First Step in Settling Your Tax Debt

December 17, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Bookkeeping is an essential aspect of managing your finances and ensuring that you are in compliance with tax laws and regulations. It involves accurately tracking and recording your income, expenses, and other financial transactions, which helps you get a clear understanding of your financial situation. In this article, we will discuss five reasons why bookkeeping is an important first step in settling your tax debt.

Determining your tax liability: One of the main reasons why bookkeeping is important in settling your tax debt is that it allows you to determine how much you owe in taxes. By accurately tracking and recording your income and expenses, you can determine your tax liability and create a plan to pay off the debt.
Accurate tax liability determination requires keeping track of your income and expenses throughout the year. This can be done through proper bookkeeping, which involves accurately tracking and recording your financial transactions. By keeping accurate financial records, you can ensure that you are reporting all of your income and claiming all of the deductions and credits you are entitled to.

Once you have accurately determined your tax liability, you can create a plan to pay off the debt. This may involve negotiating a payment plan or settlement with the Internal Revenue Service (IRS) or state tax agency. If you are unable to pay the debt in full, you may be able to negotiate a payment plan or settlement to pay off the debt over time. Having accurate financial records can help you provide the necessary information to negotiate a favorable payment plan or settlement.

In addition to helping you pay off your tax debt, accurately determining your tax liability can also help you avoid any potential penalties or fines. The IRS and state tax agencies may audit your tax return or request documentation to verify the information you have reported. Having accurate and complete financial records can help you provide the necessary documentation and avoid any potential penalties or fines.

Overall, determining your tax liability is an important step in settling your tax debt because it helps you create a plan to pay off the debt, avoid any potential penalties or fines, and ensure compliance with tax laws and regulations. By accurately tracking and recording your income and expenses and calculating your tax liability, you can take control of your financial situation and work towards paying off your tax debt.
Identifying potential tax deductions: First and foremost, tax deductions reduce the amount of taxable income you have, which means you will owe less in taxes. If you are able to claim enough deductions, it could potentially lower your tax bill enough to help you pay off your tax debt.
Additionally, identifying potential deductions can help you negotiate with the Internal Revenue Service (IRS) to pay off your debt. If you can show that you have taken steps to reduce your taxable income, such as by claiming deductions, the IRS may be more likely to work with you on a payment plan or offer other relief options.

Finally, identifying potential deductions can help you avoid getting into tax debt in the first place. By claiming all the deductions you are entitled to, you can reduce your tax bill and ensure that you are not overpaying on your taxes. This can help you avoid the need to borrow money or pay interest and penalties on unpaid taxes.

Overall, identifying potential tax deductions is an important step in managing your tax debt and ensuring that you are paying the right amount of taxes. By taking the time to review your tax situation and claim all the deductions you are entitled to, you can potentially reduce your tax bill and make it easier to settle your tax debt.
Compliance with tax laws and regulations: Proper bookkeeping is essential for compliance with tax laws and regulations. It helps to ensure that you are accurately reporting your income, expenses, and other financial transactions. This is important because it allows you to accurately determine how much tax you owe and to file your tax returns on time.
If you are not keeping proper records or if you are not reporting your income and expenses accurately, you may end up owing more in taxes than you should. This can lead to tax debt, which can be difficult to resolve.

On the other hand, if you are keeping accurate records and complying with tax laws and regulations, it will be easier for you to settle your tax debt. For example, if you have overpaid your taxes, you may be able to get a refund or credit to help offset your tax debt. If you have underpaid your taxes, you may be able to negotiate a payment plan or offer in compromise with the IRS to help resolve your tax debt.

In short, proper bookkeeping and compliance with tax laws and regulations are essential for settling your tax debt. It is important to keep accurate records and to report your income and expenses accurately in order to avoid tax debt and to resolve any tax debt that may arise.
Negotiating a payment plan or settlement: Negotiating a payment plan or settlement for your tax debt can be a complex and stressful process, but it’s important to remember that the Internal Revenue Service (IRS) wants to work with you to find a solution that is mutually beneficial. One way to approach this process is by using bookkeeping to help negotiate a payment plan or settlement.
Here are some steps you can take to use bookkeeping to negotiate a payment plan or settlement for your tax debt:
- Gather all of your financial documents, including tax returns, pay stubs, bank statements, and any other documents that show your income and expenses.
- Use bookkeeping software or a spreadsheet to create a budget that shows how much money you have coming in and going out each month. This will help you understand how much you can realistically afford to pay towards your tax debt.
- Contact the IRS and explain your situation. Be honest about your financial situation and explain that you are willing to work with them to find a solution.
- Consider negotiating a payment plan with the IRS. If you can’t pay your tax debt in full, you may be able to negotiate a payment plan that allows you to pay off your debt in smaller monthly installments.
- Alternatively, you may be able to negotiate a settlement with the IRS. This could involve paying a reduced amount of your tax debt in exchange for a release from the remaining balance.
- Use your budget and financial documents to support your case for a payment plan or settlement. The IRS will consider your ability to pay when determining the terms of a payment plan or settlement, so it’s important to have a clear understanding of your financial situation.
- Keep track of your payments and make sure to meet all of the terms of your payment plan or settlement. If you fail to make payments or meet the terms of your agreement, the IRS may take enforcement action, such as garnishing your wages or seizing your assets.
By using bookkeeping to help negotiate a payment plan or settlement for your tax debt, you can work with the IRS to find a solution that is financially feasible for you. It’s important to be honest and proactive in this process, as the IRS is more likely to work with you if you are willing to take steps to resolve your tax debt.
Improved financial management: In addition to helping you settle your tax debt, accurate bookkeeping can also improve your overall financial management. By tracking your income and expenses, you can identify areas where you can cut costs and save money, and make informed financial decisions.

One of the primary benefits of proper bookkeeping is that it allows you to have a clear and accurate record of your income and expenses. This can be especially useful when it comes to tax time, as you can use your records to accurately report your income and claim any deductions or credits that you are eligible for. In addition, if you are self-employed or run a small business, proper bookkeeping can help you to keep track of your business expenses, which can be deductible for tax purposes. This can help to reduce your overall tax burden and make it easier to settle any tax debt that you may owe.

Proper bookkeeping can also help you to identify any errors or discrepancies in your tax return. For example, if you have made a mistake in calculating your income or claiming deductions, this may result in tax debt. By keeping accurate and detailed records, you can more easily identify and correct any errors before filing your tax return, which can help to reduce the likelihood of incurring tax debt.

In general, bookkeeping is a necessary first step in resolving your tax debt, since it aids in understanding your financial situation, identifying tax deductions, complying with tax laws, negotiating a payment plan or settlement, and improving your financial situation. By accurately tracking and recording your income and expenses, you can create a plan to pay off your tax debt and avoid any potential penalties or fines.

How Peak Reliance Can Help

If you’re looking for expert bookkeeping services to help you keep track of your financial transactions and improve your overall financial management, look no further than Peak Reliance. Our team is here to help you streamline your bookkeeping processes, identify and correct errors, and make informed decisions about your finances.

Need help settling your tax debt? We can assist you in negotiating a payment plan with the tax authorities, identifying any errors or discrepancies in your tax return, and finding ways to reduce your overall tax burden.

To learn more about our services and pricing, visit our pricing page or give us a call at (718) 218-5558. You can also email us at [email protected] with any questions or to schedule a consultation. We look forward to helping you achieve financial stability and success.

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8 Common Tax Issues and Their Solution

Post author By peakreliance
Post date December 16, 2022
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8 Common Tax Issues and Their Solution

December 16, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Taxes can be a complicated and confusing topic for many people. While everyone is required to pay taxes, there are a variety of issues that can arise that can make the process even more difficult. Here are 8 common tax issues and solutions to help you navigate through them.

Filing taxes late
If you miss the deadline to file your taxes, you may be subject to penalties and interest. To avoid this, make sure to file your taxes on time, even if you can’t pay the full amount due. If you need more time to file, you can request an extension using Form 4868. This will give you an additional six months to file your taxes, but it does not extend the deadline to pay any taxes owed. If you can’t pay your taxes in full, you can make partial payments and work out a payment plan with the IRS.
Incorrect information on your tax return
If you realize that you have made a mistake on your tax return, don’t panic. Simply file an amended return using Form 1040X. Be sure to double-check all of your information and make sure it is accurate before submitting the amended return.
Not receiving a tax refund
If you’re expecting a tax refund and haven’t received it, there could be a few reasons for this. It could be that your return was lost in the mail, or that it was sent to the wrong address. It could also be that your refund was applied to a past due debt or used to offset any unpaid taxes. To check the status of your refund, you can use the IRS’s “Where’s My Refund” tool online.
Receiving a notice from the IRS
If you receive a notice from the IRS, don’t ignore it. It’s important to respond to the notice as soon as possible, even if you think it’s a mistake. If you need help understanding the notice, you can contact the IRS or seek the assistance of a tax professional.
Failing to report all of your income
If you fail to report all of your income on your tax return, you may face penalties and interest. It’s important to report all of your income, even if you don’t receive a W-2 or 1099 form for it. If you receive a notice from the IRS for failing to report all of your income, it’s best to respond to the notice and pay any additional taxes owed as soon as possible to minimize any penalties and interest.
Not paying estimated taxes
If you are self-employed or have income that is not subject to withholding, you may be required to pay estimated taxes. These taxes are due on a quarterly basis and must be paid on time to avoid penalties. If you’re having trouble paying your estimated taxes, you can contact the IRS to request a payment plan or extension.

By being aware of these common tax issues and knowing how to address them, you can ensure that you are in compliance with tax laws and avoid any unnecessary headaches. If you have any questions or concerns about your taxes, it’s always a good idea to seek the help of a tax professional.
Forgetting to set aside money for taxes
Not setting aside money to pay taxes can be a serious mistake that can lead to financial difficulties. When you don’t pay your taxes on time, you may be subject to penalties and interest, which can add up quickly and make it even more difficult to pay what you owe.

One way to avoid this issue is to set aside a portion of your income each month specifically for taxes. This way, you’ll have the money you need when it’s time to file your taxes and pay what you owe. You can also consider adjusting your withholding on your paychecks so that more money is taken out each pay period to cover your taxes. This will help to ensure that you have the funds available to pay your taxes when they are due.

If you are self-employed or have income that is not subject to withholding, you may be required to pay estimated taxes on a quarterly basis. It’s important to make sure you set aside enough money to cover these payments to avoid any penalties and interest.

If you are having trouble paying your taxes, it’s important to contact the IRS as soon as possible. The IRS may be able to work with you to set up a payment plan or offer other options to help you pay your taxes. It’s always better to address any issues with taxes early on rather than waiting until it’s too late.
Keeping poor record
Poor record keeping can lead to a variety of problems, including tax issues. When you don’t keep accurate records of your income and expenses, it can be difficult to prepare your tax return accurately and claim all of the deductions and credits that you are entitled to. This can result in you paying more in taxes than you should, or even facing penalties and interest if you make mistakes on your tax return.

In addition to tax issues, poor record keeping can also make it difficult to track your finances and make informed financial decisions. It can be challenging to keep track of your spending and budget if you don’t have accurate records of your income and expenses.

To avoid these problems, it’s important to keep good records of your financial information. This includes keeping track of all of your income, including salary, investments, and other sources of income. You should also keep track of your expenses, including bills, receipts, and other documents related to your financial activities. By keeping accurate records, you can ensure that you are prepared to file your tax return accurately and claim all of the deductions and credits you are entitled to. You’ll also have the information you need to track your finances and make informed financial decisions.

Are you struggling with tax issues and feeling overwhelmed? Don’t worry, you’re not alone. At Peak Reliance, we understand that tax issues can be complex and stressful, which is why we offer a range of services to help you navigate the process and find the best solution for your specific needs. Check out our pricing and various plans, call us at +1 (718) 218-5558 or email us at [email protected] to get started.

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2022 Corporate Income Tax in Florida: A Comprehensive Guide

Post author By peakreliance
Post date December 14, 2022
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2022 Corporate Income Tax in Florida: A Comprehensive Guide

December 14, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Corporate income tax is an important aspect of running a business. It can be a complicated and time-consuming task to understand and stay up-to-date on the latest corporate income tax laws. In Florida, the corporate income tax rate is subject to change each year. As we look ahead to 2022, it is important to familiarize yourself with the current corporate income tax laws in Florida. This article will provide an overview of the corporate income tax in Florida for 2022, including the current tax rate, filing deadlines, and other important information. By understanding the corporate income tax laws in Florida, you can maximize the benefits of your business and minimize any unnecessary stress or costs.

Overview of Corporate Income Tax in Florida

Corporate income tax is a tax on the net income of businesses that are incorporated. An incorporated business is one that has received legal recognition by forming a corporation or limited liability company. All 50 states and the District of Columbia collect corporate income tax, but the rates, due dates, and rules vary from state to state. The corporate income tax is one of the most expensive taxes on businesses. The corporate income tax rate is determined by the state in which a business operates. States also have different thresholds for when businesses are subject to corporate income tax. For example, some states require businesses to have a minimum amount of gross annual revenue before they are required to pay corporate income tax.

Current Corporate Income Tax Rate in Florida

Florida’s current corporate income tax rate is 5.5%. This rate is set to remain in effect throughout 2022. All corporations operating in the state of Florida are subject to this rate, regardless of the amount of revenue they generate. This rate applies to corporate income tax returns that are due by May 01 of each year.

2022 Corporate Income Tax Filing Deadline

Corporate income tax returns due in 2022 will be filed on May 01, 2023. This means that you will have until May 01 to file the corporate tax return for the year 2022. It is recommended that you file your corporate tax return as soon as possible after the end of the calendar year. The longer you wait to file your corporate tax return, the more likely you are to forget important details and incur additional expenses.

Corporate Income Tax Exemptions in Florida

Certain types of corporations will not be subject to the state corporate income tax in Florida. Depending on the type of corporation, there may be additional tax incentives and benefits.

The following types of corporations are exempt from the state corporate income tax in Florida:

Wholly owned corporations: A wholly owned corporation is a company that is 100% owned by one corporation.
Partially owned corporations: Partially owned corporations are corporations that are partially owned by another corporation. The corporation that owns a partially owned corporation is responsible for paying the state corporate income tax on the profits generated by the partially owned corporation.
Non-profit corporations: Non-profit corporations are corporations that are primarily operated for charitable, scientific, or educational purposes.

Penalties for Not Filing Corporate Income Tax in Florida

If you fail to file a corporate income tax return, you may be subject to penalties. For example, if you fail to file your corporate income tax return by the May 01st deadline, you may be fined up to $5,000. However, if you file your corporate income tax return after being notified that you were behind on filing, you will not be fined or penalized. You may be able to avoid or reduce penalties by filing your corporate tax return as soon as possible after the end of the calendar year. The longer you wait to file your corporate tax return, the more likely you are to forget important details and incur additional expenses.

How to File Corporate Income Tax in Florida

You will need to file a corporate income tax return if you operate a corporation in Florida that meets the minimum gross revenue threshold per year. Once your company has met this threshold, it is required to file a corporate income tax return. If you are operating a corporation in Florida, it is important to file your corporate income tax return on time to avoid fines and penalties. You can file your corporate income tax return online or by mailing a paper copy. You will be required to provide information such as your company name and address, the amount of gross revenue your company generated during the calendar year, the amount of corporate income tax you owe, and other important details. If you file your corporate income tax return online, you may be able to pay your taxes electronically. You will be required to have a valid Florida Corporate Tax ID before you can file your corporate income tax.

Corporate Income Tax Planning

As a business owner, it is important to understand and plan for your company’s corporate income tax obligations. By taking the time to understand the current corporate income tax rates in Florida, you can prepare for the tax obligations associated with running your business. By reviewing the due dates for filing corporate income tax returns, you can be sure that your business stays compliant with state tax laws. This can help you avoid costly fines and penalties. If you are unsure about any aspect of the corporate income tax in Florida, you should reach out to your accountant for help. Your accountant will have experience understanding the current corporate income tax rates in Florida and may be able to help you plan for upcoming tax obligations.

Resources for Understanding Corporate Income Tax in Florida

Florida Department of Revenue: This is the state agency responsible for collecting corporate income tax. It can provide you with important details about corporate income tax in Florida.

IRS: The IRS also provides information about corporate income tax on its website.

Tax Foundation: This non-profit organization can help you understand the history of corporate income tax. This website provides a comprehensive overview of corporate income tax rates by the state since 1916

Citizens for Tax Justice: This website provides information about the history of the corporate income tax and its impact on the economy.

Tax Policy Center: The Tax Policy Center can help you understand the impact of corporate income tax rates on the economy.

Tax Analysts: This website provides a historical overview of the corporate income tax.

Tax History Project: This website provides a comprehensive overview of the corporate income tax rates by state since 1916.

Frequently Asked Questions About Corporate Income Tax in Florida

How much are corporate taxes in Florida?

The corporate income tax rate in Florida is 5.5%. All corporations operating in the state of Florida are subject to this rate, regardless of the amount of revenue they generate.

How long have corporations been taxed in the US?

The federal government began taxing corporations in 1909. At that time, the corporate income tax rate was 1%.

What are the corporate income tax rates in the US?

The corporate income tax rate varies by state.

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W-2 vs. W-4: A Complete Guide for Businesses on Tax Forms and Withholding

Post author By peakreliance
Post date December 12, 2022
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W-2 vs. W-4: A Complete Guide for Businesses on Tax Forms and Withholding

December 12, 2022

peakreliance

Accounting, Bookkeeping, Taxes

As a business owner, hiring employees is an exciting milestone that can help your company continue to grow and thrive. But while hiring top talent is a great achievement, the paperwork that comes with it is less enjoyable. When you bring on full-time or part-time employees, you’ll need to file W-2 and W-4 tax forms. If you’re not sure how to differentiate between the two or how to file them, our tax guide has you covered. We’ll help you understand the differences between W-2 and W-4 forms and provide step-by-step instructions for filing them accurately and on time.

The Difference Between W-2 & W-4

The main difference between W-2 and W-4 forms is who fills them out and how they are used. W-4 forms are completed by employees when they start a new job and are used by their employer to process payroll and calculate withholdings. W-2 forms, on the other hand, are completed by employers after the end of the year and contain a record of the employee’s wages, withholding, and other deductions. Employees receive a copy of their W-2 by January 31st of the following year, and employers are required to file a copy with the IRS. It’s important for both employees and employers to understand the differences between these two forms and to complete and file them accurately and on time.

What’s a W-4 form?

Form W-4, also known as the Employee Withholding Certificate, is used to collect information needed to calculate how much income tax to withhold from each employee’s paycheck. To complete the form, employees need to provide basic identifying information such as their name, address, social security number, marital status, and number of dependents. They submit the form to their employer, who is responsible for keeping records of it. The IRS does not receive a copy of the W-4. Employees are responsible for updating their W-4 if they have a life-changing event that affects their withholding. They should also review it periodically to ensure it is up-to-date. Employers must have a W-4 on file to process payroll for their employees.

How to Get and Use the W-4 Form

To obtain a copy of the federal W-4 form, you can visit the IRS website or contact your payroll provider. Many payroll providers will provide a copy of the form when you start using their software. Keep in mind that the IRS periodically updates the form, so make sure you are using the most recent version. When hiring new employees, be sure to provide them with a copy of the form and ask them to complete it before the next payroll processing date. You should also request that your current employees fill out the form if you do not have one on file for them. Completed W-4 forms should be kept in the employee’s payroll file for reference

State Withholding Tax

While some states use the federal W-4 form to calculate state tax withholding, others have their own separate forms that employees must complete. If you have employees in multiple states, they will need to fill out the appropriate withholding form for their state of residence. In addition, you must register with each state’s taxing authority and remit state payroll tax payments according to the state’s rules. If you work with a payroll processor, they should handle the registration and payment process on your behalf.

What’s a W-2 Form?

Form W-2, also known as the Wage and Tax Statement, is completed by the employer and provided to employees after the end of the year. It contains basic identifying information such as the employee’s name, address, and social security number. Employers must send W-2s by January 31st of the following year, and there are steep fines for missing the filing deadline. It is essential that your business file the forms accurately and on time.

The W-2 contains basic identifying information such as name, address, and social security number.

Form W-2 contains several important boxes with information that employees will use to complete their individual tax returns. The most important boxes for your employees are:

1 (Wages, tips, and other compensation) – total amount paid to the employee during the year

2 (Federal income tax withheld) – amount of federal income tax withheld by the employer

3 (Social security wages) – total wages subject to Social Security tax

4 (Social security tax withheld) – employee wages withheld for Social Security tax

5 (Medicare wages and tips) – total wages subject to Medicare tax

6 (Medicare taxes withheld) – amount withheld for Medicare taxes

17 (State income tax) – amount withheld for state income taxes, which may be blank if you are in a state that does not collect state income tax

Businesses are required to file W-2s by January 31st each year, but they can file an amended W-2 form if an error is identified. There is no deadline for filing an amended W-2. The IRS uses the information on W-2s to verify that employees have claimed all of their wages on their individual income tax returns.

To fill out a W-2 form, follow these steps:

Gather all necessary information, including the employee’s name, Social Security number, address, and income information.
Make six copies of the W-2 form, labeled as follows:
- Copy A: sent to the Social Security Administration
- Copy 1: sent to city, state, or local tax departments
- Copies B, C, and 2: given to your employee
- Copy D: kept for your records
Fill out each copy of the form with the required information.
File the forms electronically if possible. Employees can opt-in to electronic delivery of their W-2 forms.
Keep a copy of the forms for your records, and give copies to your employees as specified.

It is important to accurately and completely fill out the W-2 forms to ensure that employees receive the correct amount of tax withholding, and to avoid penalties from the IRS.

To complete the employer information section of a W-2 form:

In boxes b, c, and d, report the name and address of your business, as well as your employer identification number (EIN).

To complete the employee information section of a W-2 form:

In boxes a, e, and f, fill in the employee’s name, address, and Social Security number. This information will be used to mail the form to the employee if you send physical copies, and to identify the employee for tax purposes.

To report wages and withholdings on a W-2 form:

Use boxes 1-14 to report the employee’s gross pay for the tax year and the amount withheld for taxes. This should include all types of withholdings, such as federal, state, and local taxes, as well as Social Security and Medicare.
These boxes also contain information about adjustments to the employee’s wages, such as deductions for life insurance, health insurance, and retirement plan contributions.
Box 14 contains miscellaneous information, such as union dues and tuition assistance.

To report state and local information on a W-2 form:

Use boxes 15-20 to report any state and local withholding information. These boxes may also contain information about local taxes and other withholdings. Note that very few localities have separate withholdings.

Ensuring that your business is tax-compliant can be a challenging task, but it is essential for the success and growth of your company. One important step is to have accurate W-4 forms on file for all of your employees, as this will help you calculate their tax withholding correctly. Additionally, it would help if you made sure to submit accurate W-2 forms to the appropriate authorities before the end of January.

Don’t let taxes and payroll stress you out. Contact our team of experts at Peak Reliance for help with your business’s W-2 and W-4 forms. Call us at +1 (718) 218-5558 or email us at [email protected] to get started.

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North Carolina Self-Employed Tax Rates for 2022: A Guide to Calculating Your Taxes

Post author By peakreliance
Post date December 11, 2022
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North Carolina Self-Employed Tax Rates for 2022: A Guide to Calculating Your Taxes

December 11, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Self-employment is a great way to build wealth and get your own office, but it comes with some unique tax considerations. When you’re self-employed in North Carolina, you may be responsible for paying taxes on income that you receive from yourself and from certain business operations—but not on other sources of income. That means you’ll need to know whether your business activity qualifies as self-employment or whether it’s something else. Keep reading to see what kinds of businesses are considered self-employed in North Carolina, what the top rates are for different types of self-employment, and how you can calculate your self-employment tax obligations.

What Is Self-Employment Income?

Self-employment income is income that you receive from your own business and that is not derived from another source. The term includes money you make as a partner in a business, as an employee on a self-employment job, as an independent contractor, or as a wife, husband, or parent who earns money on behalf of one or more people. You can also earn money as a consultant or other outside employment. If you make money this way, it is called self-employment income. When you start your own business, you may report your self-employment income as full-time or as part of your business income. If you are a full-time self-employed person, you generally must report all of your income, including income from other sources, as income from that business.

What You Need to Know About Self-Employment Income in North Carolina

When you’re self-employed in North Carolina, you’re not just earning any old amount of money. You’re earning income from a specific business, and it’s important to know the income you’re reporting as income from that business. Here’s what you need to know about self-employment income in North Carolina: Partner income—On a partner-only business, your share of the profits is reported as partner income. Employee earnings on a self-employment job—You may report the income you receive from a self-employment job as employee income on your taxes. You must include on your tax return the regular salary you receive, as well as any other income you earn as a result of your business activities. Outside income—You must include on your tax return all income that comes from outside the United States, even if you’re a non-citizen.

Self-Employment Tax Rates in North Carolina

The top tax rate you must pay on your self-employment income in North Carolina is just as it is on all other income you earn. In general, the rate is 35% of your income. However, there are a few exceptions. Some of these rates are lowered for people who are age 65 or older. Also, there are special rates for people under age 18 who are the parents or guardians of qualifying children. These rates also apply to certain groups of people who are disabled.

How to Calculate Your Self-Employment Tax Obligation in North Carolina

To calculate your self-employment tax obligation in North Carolina, first determine what portion of your income is from self-employment. This is the most important part of the equation because it determines how much income tax you will owe. To be sure you have all the information you need to calculate your income tax obligation, you can use one of several online tax calculators. You can also look up your income tax return information in your local library or assessor’s office.

Conclusion

If you’re self-employed in North Carolina, you’ll likely have to pay self-employment taxes on a portion of your income that is not related to employment. This is due to the fact that you’re self-employed and your income is not derived from another source. You may be surprised by the rates and amount that must be reported as self-employment income in North Carolina. The lower the rate you report as self-employment income, the less income tax you will owe; however, this may not be the case for all income you receive. Make sure you understand which income you’ll be reporting as self-employment income and which will be considered your primary income.

Need help with your self-employment taxes in North Carolina? Contact us at +1 (718) 218-5558 or [email protected] to learn more about our services and get expert assistance with your tax obligations.

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Georgia Self-Employed Tax Professional: Key Information on Tax Rates for 2022

Post author By peakreliance
Post date December 10, 2022
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Georgia Self-Employed Tax Professional: Key Information on Tax Rates for 2022

December 10, 2022

peakreliance

Accounting, Bookkeeping, Taxes

The self-employed are supposed to be tax-friendly. The self-employed are generally not considered professionals and their personal finances are often not as transparent as those of their professional colleagues. Self-employment can present a whole new set of challenges, but with the right tax planning, it can also present many opportunities. Understanding your risks and rewards is key to staying sane during these changes in your job and personal life. Before making any decisions about your future, you need to know whether you want to go it alone or with an accountant. It might be tempting to trust the people who keep showing up at your front door with your financial affairs, but you’ll be setting yourself up for failure if you do so. If you’re an experienced tax professional and work for a tax-prep firm, that’s great. However, for most people, this is probably not the case And even for those of us who aren’t sure if we have what it takes to become a tax pro, it’s worth looking into whether Georgia has any “unfair” taxes on the industry we choose to practice.

What Is The Difference Between Self-Employed And Independent Contractor?

The term “independent contractor” is often misused. It’s not the same thing as “freelancer,” which is another term often confused with it. A “freelancer” is someone who works for someone else and is paid for their services. “Independent contractor” is a term that describes someone who does work for themselves without being paid for it.

What Is The Difference Between Partnership And Sole Proprietorship?

A partnership is a legal form of organization in which one party, called the “partner,” is responsible for managing and controlling the activities of another, called the “partner.” A sole proprietor is typically the individual who owns and operates the business. It’s important to note that most jobs that qualify as “self-employment” do not fit the definition of partnership or sole proprietorship.

How Self-Employment Tax Changes In Georgia Are Impacting Your Practice

One of the most significant changes to the self-employment tax landscape that took effect on January 1, 2018, is the elimination of the “Roda” exception. This exception allows individuals to treat their business as a “Roda” or “rickshaw” and pay only state and federal income taxes on the full amount of profit made. The new Internal Revenue Code also changed the rules aroundstep-up in complexity. Now, people who itemize their deductions and pay more than the standard 20% tax rate will have to deal with the new rules. People who itemize their deductions and pay less than the standard 10% tax rate will not. This includes certain types of business income, including interest, dividends, and capital gains.

Best Tax Strategies For Self-Employed Tax Practitioners

If you’re self-employed, you’ll need to make a variety of decisions that affect your personal finances and your business finances in tandem. These decisions will affect your personal and business finances in different ways. The following are some of the most important ones to make. Decide what type of business you want to have. Are you going to be the primary business owner or is your company going to provide the majority of your income? If you’re the primary business owner, you can deduct the entire amount paid for business expenses, including property taxes and business interest. Thus, if your primary source of income is business income, you’ll want to make sure that you are able to itemize your deductions. Decide where you’ll accept payment. Do you plan to sell products or services? If so, you’ll want to decide whether you want to accept payment in cash or by check. Moreover, you’ll want to decide whether you want to accept payment by check in person, by mail, or by phone. Decide how much to charge for your product or service. Do you plan to charge a fee for your product or service? If so, decide how much to charge and whether that fee will cover the costs of business expenses, including property taxes and business interest.

Where To Start With Tax Preparation For Yourself-employed Client

If you’re just starting out as a self-employed individual, there are a few pieces of information you’ll want to know. First, you’ll want to get your taxes done every year and understand your individual taxes as well as your firm’s. You can find a list of firms in your area by visiting the IRS’s website. You can also call your local IRS office to find out if they accept tax returns. Note that you don’t have to file your taxes jointly with your spouse. You can file them separately and claim a separate tax return for yourself.

Summing Up

The self-employed are unique in that they lack many of the protections and benefits that are available to those who work for a company. Additionally, the taxes they pay are generally lower than those paid by people who work for a company. This article has provided details on the taxes that you as an individual will have to deal with and what you need to know. If you’re self-employed, it is critically important that you understand your risks and rewards.

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The Self-Employment Tax Rates for Michigan in 2022

Post author By peakreliance
Post date December 9, 2022
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The Self-Employment Tax Rates for Michigan in 2022

December 9, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Self-Employed Tax Rates in Michigan tend to be the highest in the country. Unless you have a very large company, chances are you’ll need to pay income taxes on some of your earnings as well. Fortunately, there are various ways you can reduce your tax bill so that you end up paying less. In general, self-employment taxes fall into three main categories: social security and Medicare taxes; self-employment tax (SE tax); and excise taxes. Let’s take a look at how those differ and what each of them costs you in terms of money.

Social Security and Medicare Taxes for Self-Employed Taxpayers in Michigan in 2022?

The amount you pay in Social Security and Medicare taxes as a self-employed taxpayer in Michigan in 2022 will depend on your income and how much you pay as a percentage of income. How you prepare for these taxes can affect how much you pay and, thus, how much your taxes decrease. There are a few things you can do to ensure a lower tax burden as a self-employed taxpayer in Michigan in 2022.

Self-Employment Tax (SE tax) for Self-Employed Taxpayers in Michigan in 2022

The most important thing you can do is find a lower-paying job. This may seem obvious, but it’s easy to get distracted by all the new opportunities that come with self-employment. Often, the best way to start looking for a new job is to get your current one filled out and transferred to a new position. Once you’ve found a new job, make sure you let your new employer know that you’re interested in moving. This could be the perfect opportunity to start looking for a new job.

SE Tax for Self-Employed Taxpayers in Michigan in 2022

On the surface, the idea of paying taxes on earnings from a new business might sound like a good thing. After all, you’re not just paying taxes on your income, you’re also paying taxes on your profits. However, the reality is that in most cases, the amount of income tax you pay as a self-employed taxpayer in Michigan in 2022 will be lower as a percent of your income if you’re single and not married. In fact, solo practitioners in Michigan are required to pay a 0% flat rate on their income from January 1, 2022, through December 31, 2022. This flat rate applies regardless of whether you’re the primary or a sublessor in a business. Thus, the only person who pays taxes on income from a sublicensed business is the person who owns the business. That person is the taxpayer. As a solo practitioner, you’ll pay income taxes on your worldwide income just like anyone else, regardless of where you live. Thus, in 2022, if you’re single and not married, you’ll pay income taxes on the worldwide income of $0, $5,000, or $10,000, respectively.

Excise Taxes for Self-Employed Taxpayers in Michigan in 2022

You’re likely familiar with excise taxes, which are levied on specific products or services and then collected as a tax. In the case of excise taxes, you’re actually required to pay the tax even though you don’t typically consider yourself a consumer of the product or service in question. For example, a retailer may determine that the price of alcohol purchases made by its employees and/or contracted workers is too high and impose an excise tax on those purchases. The retailer then may ask the government to collect the tax as a tax on the entire population, as opposed to a select group of consumers. The excise tax is then collected as a tax on the entire group of people who are not paying the higher price for alcohol. Similarly, an employer may decide to impose a retirement plan tax on their employees who are required to contribute to that plan. The tax is then collected as a tax on the entire group of people not just the individuals who are required to contribute.

Conclusion

The amount you pay in taxes as a self-employed taxpayer in Michigan in 2022 will depend on a number of factors, including your income and the amount of taxes paid as a percent of income by other taxpayers in your industry. There are a few things you can do to lower your tax bill as a solo practitioner in Michigan in 2022. Find a lower-paying job and don’t let yourself get distracted by all the new opportunities that come with being self-employed.

Need help with your self-employment taxes in Michigan? Contact us at +1 (718) 218-5558 or [email protected] to learn more about our services and get expert assistance with your tax obligations.

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Self-Employment Tax Rates in Ohio in 2022

Post author By peakreliance
Post date December 8, 2022
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Self-Employment Tax Rates in Ohio in 2022

December 8, 2022

peakreliance

Accounting, Bookkeeping, Taxes

When you trade jobs frequently, it’s easy to overcompensate for a challenge by adding more responsibilities or tasks. Consequently, in the future, you might want to take on less-than-desirable jobs instead of continuing your current gig. That’s when tax law comes into play. Self-employment tax rates in Ohio are similar to other competitive manufacturing states like Indiana and Illinois. However, unlike these other states, self-employment taxes in Ohio are low. That means companies operating in the state would be better off if they avoided creating jobs altogether and only self-employed people who are willing to work multiple years at one time qualify for this state’s low self-employment tax rate.

Self-Employment tax rates in the U.S.

The U.S. has the second-highest employment rate among developed countries, but it remains one of the most poverty-stricken nations in the world. More than a third of the workforce is unemployed and 24 percent of those are not in full-time employment. Employers with more than one employee in the U.S. are required to report those without a job on a self-employment tax return. The self-employment tax rate in the U.S. currently ranges from 18 percent to 24 percent.

Ohio Self-Employment Tax Rate

As a self-employed individual, you must pay Ohio self-employment tax, since you don’t have an employer to withhold those federal payments on your behalf. The Ohio self-employment tax totals 15.3%, with 12.4% covering Social Security and 2.9% going to Medicare.

What forms do I need to file taxes in Ohio?

To make payments to Ohio self-employment tax, you will need to use the federal Form 1040-ES, Estimated Tax for Individuals. This form includes a worksheet that can help you determine whether you are required to file quarterly estimated tax.

In 2022, Self-Employment Tax Rates in the U.S.

The rates on self-employment tax returns will change in 2022. From there, businesses will have to decide how they want to proceed. Currently, most businesses are required to pay the entire income tax on all revenue generated from self-employment. However, over time, that tax is expected to decline as more companies enter the private sector and employ more people.

Businesses with More than 1 Employee in Ohio

In 2022, businesses that employ more than one person in the U.S. will be allowed to write off the income from that employee on their tax return. Currently, these are allowed only for business expenses. Over time, these businesses are expected to use these funds to buy more goods and services from retailers and manufacturers, who will be able to write off the costs of employees as part of their annual income.

Self-Employment Tax Opportunity in Ohio

Before 2022, businesses wouldn’t be allowed to write off the income from employees who are self-employed. However, in that year, the IRS will allow firms to add a new type of entity to receive their own version of the self-employment tax benefit. This new type of entity will be called an “affiliated entity” and will be treated as if it were an employer for tax purposes.

How to Avoid Self-Employment Taxes in Ohio

One of the best ways to avoid self-employment taxes in the future is by following proper tax planning. For example, you may have a general tax savings plan that accounts for depreciation and other expenses that may be charged against your income tax return. However, if you don’t include those expenses in your plan, they may become even more attractive to you as they become more expensive to cover. Another good way to avoid self- employment taxes in the future is by making a plan for retirement. For example, many people don’t plan for retirement in their day to day work but instead automate their retirement savings by setting up a retirement account on his or her behalf.

Final Thoughts

The years ahead will be filled with challenges and challenges will be yours to overcome. Those challenges will be made easier when you understand your tax options and come to an informed decision.

Need help with your self-employment taxes in Ohio? Contact us at +1 (718) 218-5558 or [email protected] to learn more about our services and get expert assistance with your tax obligations.

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Unlock Your Business Potential: 6 Accounting Secrets to Smarter Decisions

Post author By peakreliance
Post date December 7, 2022
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Unlock Your Business Potential: 6 Accounting Secrets to Smarter Decisions

December 7, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Running a business comes with a whole host of responsibilities. From managing employees to handling customer service to staying on top of the finances, there’s a lot to manage. But one of the most important things you can do for your business is to be savvy with your accounting. Accounting is a crucial part of any business, and it’s often the key to making informed decisions that can have a big impact on the success of your business.

In this blog post, we’ll take a look at the basics of accounting, the secrets to making smarter decisions, common accounting mistakes that small businesses make, and tips to help you manage your accounting and bookkeeping more effectively. We’ll also provide you with some tools and resources to help you get started, as well as courses to help you become an accounting pro.

What is Accounting?

Accounting is the process of recording, analyzing, and reporting financial information about a business. It’s the language of business and involves tracking and recording financial transactions, measuring performance, and preparing financial statements. Accounting helps you understand the financial position of your business and make decisions based on this information.

For small businesses, accounting is especially important. It’s the key to making informed decisions that can have a big impact on the success of your business. With accurate accounting and bookkeeping, you can make decisions that will help your business grow and succeed.

Benefits of Accounting

Accounting is a powerful tool for small businesses. Having an accurate and up-to-date accounting system in place can help you make better decisions, plan for the future, and ensure you’re meeting your financial goals. Here are some of the key benefits of accounting:

Improved financial decision-making: Accounting helps you make informed decisions based on accurate financial data.
Better cash flow management: Accounting helps you track and monitor your cash flow and adjust your spending accordingly.
Increased efficiency: Accounting helps you identify areas of inefficiency and make changes to streamline processes.
Tax compliance: Accounting helps you stay up-to-date with your tax obligations and make sure you’re compliant.
Improved budgeting: Accounting helps you create and stick to a budget, giving you a better understanding of your financial situation.

Understanding the Basics of Bookkeeping

Bookkeeping is the process of recording and tracking financial transactions. It’s the foundation of accounting and involves recording all of your business’s financial transactions, such as sales, purchases, and expenses. Bookkeeping helps you track your income and expenses, which is essential for staying on top of your finances and making informed decisions.

Bookkeeping is the first step in accounting, and it’s important to make sure it’s done accurately. It’s important to keep accurate records of all financial transactions and to know how to use bookkeeping software. This will help you to more accurately track your finances and make better decisions.

Accounting Secrets to Smarter Decisions

Accounting isn’t just about tracking and recording financial transactions. It’s also about using this data to make informed decisions that will benefit your business. Here are some accounting secrets to help you make smarter decisions:

Analyze your financial data: To make smarter decisions, you need to analyze your financial data. Look for trends, identify areas of improvement, and use this data to make decisions that will benefit your business.
Set goals: Setting goals will help you stay focused and ensure you’re taking the right steps to reach your goals. Set short and long-term financial goals and use your financial data to track your progress.
Monitor your cash flow: Monitor your cash flow regularly and adjust your spending accordingly. Having a good understanding of your cash flow will help you make better decisions and plan for the future.
Track your expenses: Tracking your expenses will help you identify areas of inefficiency and make changes to save money.
Invest in accounting software: Investing in accounting software will help you save time and make sure your financial data is accurate and up-to-date.

Common Accounting Mistakes Small Businesses Make

Accounting mistakes can be costly and can have a big impact on the success of your business. Here are some of the most common accounting mistakes small businesses make:

Not tracking expenses: Not tracking your expenses can lead to overspending and cash flow problems.
Not monitoring cash flow: Not monitoring your cash flow regularly can lead to financial problems down the line.
Not staying organized: Not staying organized can lead to accounting errors and lost invoices.
Not investing in accounting software: Not investing in accounting software can lead to inaccurate data and inefficiency.
Not keeping accurate records: Not keeping accurate records can lead to mistakes and compliance issues.

Tips to Effectively Manage Accounting & Bookkeeping

Managing your accounting and bookkeeping can be a daunting task, but it’s essential for the success of your business. Here are some tips to help you effectively manage your accounting and bookkeeping:

Invest in accounting software: Investing in accounting software is one of the best ways to save time and ensure your financial data is accurate and up-to-date.
Keep accurate records: Keeping accurate records of all your financial transactions is essential for staying on top of your finances and making informed decisions.
Monitor your cash flow: Monitor your cash flow regularly and adjust your spending accordingly.
Track your expenses: Tracking your expenses will help you identify areas of inefficiency and make changes to save money.
Set goals: Setting goals will help you stay focused and ensure you’re taking the right steps to reach your goals.

Tools and Resources to Help Small Businesses Manage Their Accounting

There are many tools and resources to help small businesses manage their accounting. Here are some of the best tools and resources to help you get started:

Accounting software: Accounting software is essential for tracking and recording financial transactions, measuring performance, and preparing financial statements.
Accounting templates: Accounting templates are great for helping you create and maintain accurate financial records.
Financial calculators: Financial calculators can help you calculate things like loan payments and interest rates.
Accounting books: Accounting books can help you better understand accounting principles and how to use them to make smarter decisions.

Courses to Help With Accounting and Bookkeeping

If you’re looking to become an accounting and bookkeeping pro, there are many courses available to help you get started. Here are some of the best courses to help you become an accounting and bookkeeping pro:

Accounting Fundamentals: This course covers the basics of accounting and bookkeeping, such as setting up accounts, recording transactions, and preparing financial statements.
Advanced Accounting: This course covers Accounting concepts with lot many case studies to solve. Approaching complex topics through case studies is the best way to understand them and you will find lot many in this course.
Financial Modeling: This course covers the basics of financial modeling, such as spreadsheet design, financial analysis, and data visualization.
QuickBooks: This course covers the basics of QuickBooks, the most popular accounting software for small businesses.

Conclusion

Accounting is a powerful tool for small businesses and can be the key to making informed decisions that will benefit your business. This blog post has provided you with the basics of accounting, the secrets to making smarter decisions, common accounting mistakes that small businesses make, and tips to help you manage your accounting and bookkeeping more effectively. We’ve also provided you with some tools and resources to help you get started, as well as courses to help you become an accounting pro.

If you’re looking for help with your accounting and bookkeeping, contact Peak Reliance today. Our experienced accountants can help you set up an accounting system, manage your finances, and make smarter decisions. Call us at +1 (718) 218-5558, or email us at [email protected]. We look forward to hearing from you!

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2023 Tax Filing Deadlines: Avoid Penalties with Our Comprehensive Guide

Post author By peakreliance
Post date December 6, 2022
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2023 Tax Filing Deadlines: Avoid Penalties with Our Comprehensive Guide

December 6, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Tax filing and extension deadlines for 2023 are quickly approaching and it is important to be aware of them in order to avoid costly penalties. Tax filing and extension dates vary from year to year, so it is important to stay up to date on the current deadlines. Knowing the dates and understanding the consequences of not meeting them is critical for anyone looking to avoid a costly penalty. This article will provide an overview of the 2023 tax filing and extension deadlines, as well as important information on how to submit an extension request and the consequences of not meeting the deadline. With this information, you can ensure that you are filing your taxes on time and avoiding any costly penalties.

Overview of 2023 Tax Filing and Extension Deadlines

The tax filing and extension deadlines for 2023 vary depending on the type of taxpayer you are and the type of tax return you are filing. The following table provides an overview of the tax filing and extension deadlines.

Tax Type	Tax Filing Deadlines	Extension Deadlines
Individual Income Taxes	April 15	October 15
Corporate Taxes	April 15	September 15
Trust and Estate Taxes	April 15	October 15
Self-Employment Taxes	March 15	September 15
Other Taxes	April 15	September 15

Submitting an Extension Request

If you are unable to meet the standard tax filing or extension deadline, you can submit an extension request form. Depending on the type of tax return you are filing, you may be able to file a paper extension request form, or you may be required to electronically file an extension request. Paper extension request forms are typically provided at the time an individual tax return is due. If you are required to electronically file an extension request, you will be provided with an official IRS form. You can find extension request instructions and forms on the IRS website. If you meet the criteria for an extension request, it is important to submit the form on time to avoid a penalty. Taxpayers who are granted an extension are required to pay any taxes they owe by April 15, the following year. If you are granted an extension and are unable to pay the taxes you owe by the April 15 deadline, you can avoid a penalty by entering into a payment plan with the IRS. If an extension request is accepted, the IRS will not charge interest on any taxes that are paid past the original deadline.

Penalties for Not Meeting the Deadlines

If you are unable to meet the standard tax filing or extension deadline, you will face a penalty. The severity of the penalty varies depending on the type of tax you are filing and the length of time you are unable to meet the deadline. For example, failing to file an individual tax return by the standard deadline will result in a failure-to-file penalty. The failure-to-file penalty is 5% for each month that the tax return is late. The maximum penalty for a failure-to-file tax return is 25% of the amount due on the return. If you fail to pay taxes that are owed by the standard deadline, you will be charged a failure-to-pay penalty. The failure-to-pay penalty is 0.5% of the amount due for each month that the taxes are not paid. The maximum penalty for a failure-to-pay tax bill is 25%.

Tax Filing and Extension Deadlines for Self-Employed Individuals

If you file as self-employed, you will be required to file a Form 1040 with estimated taxes. As a self-employed individual, you are responsible for paying taxes throughout the year, rather than waiting until April to pay your taxes as an employee would. Self-employed individuals are required to file taxes on a quarterly basis and pay any taxes due on a quarterly basis. The standard tax filing deadline for self-employed individuals is March 15. However, if you are a self-employed individual, you may be able to submit an extension request to extend the filing deadline. You will be required to submit an extension request electronically via the IRS website. If you meet the criteria for an extension request, the IRS will extend the filing deadline to September 15.

Tax Filing and Extension Deadlines for Corporations

If you file as a corporation, taxes are due on the 15th of the month following the end of the quarter. Taxes are due on April 15 for the third quarter, which ends on September 30. If you are filing as a corporation and are unable to meet the standard tax filing deadline, you can submit an extension request. You will be required to submit an extension request electronically via the IRS website. If you meet the criteria for an extension request, the IRS will extend the filing deadline to September 15.

Tax Filing and Extension Deadlines for Non-Profits

If you are a non-profit organization, taxes are due on the 15th of the month following the end of the quarter. Taxes are due on April 15 for the third quarter, which ends on September 30. If you are a non-profit organization and are unable to meet the standard tax filing deadline, you can submit an extension request. You will be required to submit an extension request electronically via the IRS website. If you meet the criteria for an extension request, the IRS will extend the filing deadline to September 15.

Tax Filing and Extension Deadlines for Individuals

If you file as an individual, taxes are due on the 15th of the month following the end of the quarter. Taxes are due on April 15 for the third quarter, which ends on September 30. If you are an individual and are unable to meet the standard tax filing deadline, you can submit an extension request. You will be required to submit an extension request electronically via the IRS website. If you meet the criteria for an extension request, the IRS will extend the filing deadline to October 15.

Tax Filing and Extension Deadlines for Trusts and Estates

If you are a trust or estate that is required to file an income tax return, taxes are due on the 15th of the month following the end of the quarter. Taxes are due on April 15 for the third quarter, which ends on September 30. If you are a trust or estate and are unable to meet the standard tax filing deadline, you can submit an extension request. You will be required to submit an extension request electronically via the IRS website. If you meet the criteria for an extension request, the IRS will extend the filing deadline to October 15.

Tips for Meeting the Tax Filing and Extension Deadlines

The following are tips for meeting the tax filing and extension deadlines. Follow the tips below to ensure that you meet the tax filing and extension deadlines, do not incur a penalty and receive your tax return by the April 15 due date.

Resources for Further Assistance

Tax filing and extension deadlines are critical. It is important to be aware of them in order to avoid costly penalties. With this article, you can ensure that you meet the deadlines and receive your tax return by the April 15 due date. If you have any questions about the tax filing and extension deadlines, contact a tax professional.

Get the professional help you need to ensure you meet all your tax deadlines – trust Peak Reliance to guide you through the process.

Check out our pricing plans or call us at +1 (718) 218-5558 for more information. You can also email us at [email protected]

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