Tax Forms - Vyde

Q&A: How to file a corporate business income tax extension with the IRS

The IRS allows businesses to file an income tax extension which provides additional time beyond the original deadline for filing income taxes. For most business partnerships, the original filing date is April 15th; while most corporations, including S-Corps and C-Corps have their taxes due on March 15th. A corporate business income tax extension provides an additional 5 or 6 months to file.

All businesses owners other than sole proprietors should submit an IRS Form 7004 to request an income tax extension. Since all business activities are reported on a sole proprietor’s personal tax return, they will need to submit a Form 4868 instead. You do not need to provide a reason for requesting a tax extension, but your income tax extension request must be submitted by the original due date of your taxes (March or April 15th). Business tax extensions are automatic and only rejected if there is an error in the information provided on the Form 7004, such as an incorrect tax ID number.

A corporate business income tax extension does not give you extra time to pay your taxes, it only provides additional time to fill out your tax forms. You are still expected to pay any taxes you may owe by the original due date. It is best to pay your taxes when you submit your tax extension to avoid IRS penalties and interest charges.

A business tax extension can be filed electronically or by mail, but must be filed online by midnight or postmarked by the original tax deadline.

If you filed a business income tax extension this year and need help preparing your taxes, Vyde can help.

Q&A: My 6 month extension on my corporate business taxes is due on 9/15. Help!

If you filed a 6 month tax extension with the IRS for your corporate business taxes back in April, it probably seemed like October 15th was eons away. However, that rapidly approaching October 15th deadline may have you feeling a little stressed out. If you filed a tax extension and still haven’t finished your tax return, here’s what you need to do:

If you owe a tax bill to the IRS, make sure you paid it when you submitted your 6 month corporate business tax extension. If you didn’t pay your tax bill then, that is the most important thing to take care of. The sooner you make that payment to the IRS, the less penalties and interest you will have to pay.
Start your return now. Don’t wait until October 14th to start on your tax return and then rush through it. Give yourself time to gather the proper documents and file your corporate business taxes accurately. Corporate business taxes can get complicated in a hurry with multiple forms to fill out; it’s best to take your time and do it right the first time so that you don’t have to worry about filing an amended return later on.
E-file or send your tax return to the IRS by October 15th. The IRS does not accept e-filed tax returns after October 15th and mailed tax returns must be postmarked by this date as well.
Contact a CPA. They can help you gather needed tax information, accurately fill out your tax return, and file it for you. They can even help you set up a payment or installment plan with the IRS if you cannot make your full payment right away. Vyde accountants can help you file your corporate business taxes with the IRS before the October 15th deadline. Contact an accountant with any questions you may have about your tax extension.

Top 10 Things You Should Do If You File a Corporate Business Tax Extension

If you filed a corporate business tax extension this year, you now have an additional five or six months to file your taxes, depending on when your original tax deadline was. Most corporate business tax extension requests allow a business owner until October 15th file taxes with the IRS. Some tax extensions are only valid until September 15th if they are operating based on a calendar year, rather than a fiscal year.

Assuming you’ve already sent your Form 7004 to the IRS requesting an extension, here’s what you need to do next:

Determine your tax payment and submit it to the IRS before April 15th. If your business bookkeeping is up to date, you should be able to determine your payment total by multiplying your taxable income by your current tax rate.
Subtract any quarterly estimated tax payments you have already made throughout the year from your tax payment. It is best to submit your tax payment and your tax extension request at the same time.
Wait for an approval from the IRS. Unlike a personal tax extension request, a corporate business tax extension must be approved before proceeding. The IRS will generally approve or deny your request within 24 hours of submitting your corporate business tax extension paperwork.
Check to see if you need to file a state tax extension form as well. If you don’t owe any state taxes, you do not need to file an extension form. Click here for specific instructions on filing a personal tax extension in your state. In many cases, unless you owe state taxes, your federal automatic extension can be used to extend your state return(s) as well.
If you are not able to pay your entire tax bill or did not submit any taxes due by the April 15th deadline, contact the IRS about setting up a payment or installment plan.
Small businesses with employees can apply for an in-Business Trust Fund Express installment agreement. Find out if you qualify here.
If you haven’t already, start preparing your tax return now. If you filed a corporate business tax extension but don’t necessarily need the full five or six months, it is best to get your return completed as soon as possible.
If your corporate business tax extension request happened to be rejected by the IRS, they will notify you. Your request may be rejected for various reasons including a recent name change, business type change, if you moved your office, or entered your Tax Identification Number incorrectly. You will need to make any corrections on your tax extension request and resubmit.
Hire a professional. If you’re behind on your medium or small business bookkeeping and taxes, a professional accountant can help you get caught up, file your taxes by your extended deadline, and maintain current records for the tax year ahead.
Submit your tax return by the September or October 15th deadline. If you plan to e-file, your return must be submitted by midnight; if you plan to mail your tax return to the IRS, it will need to be postmarked by the due date.

Filing a corporate business tax extension is can be a complicated process, depending on your business entity type and the amount of tax documents you need to catch up on. If you still have questions about your personal tax extension, contact Vyde; we can help.

7 Accounting Things To Do On An Employee’s First Day

When it comes to hiring a new employee, there is a lot of work to be done before the training even begins. Employers have to post the job, screen applicants, conduct interviews, perform background checks and more, all before the employee is even hired.

After hiring an employee, there is even more work to be done. However, hiring a new employee doesn’t have to be as tedious as it sounds if you already have a new hire checklist in place.

Here are seven accounting tasks to add to your new hire checklist for an employee’s first day:

Fill out an I-9. This proves your employee is eligible to work in the US. Find the official form, here.
Fill out a W-4. This form ensures that the right amount of taxes is withheld from an employee’s paycheck, based on family size, insurance withholdings, and more. This form will then need to be sent to your company’s payroll department.
Add the employee to your worker’s compensation plan.
Have the employee fill out health insurance paperwork.
If you offer a benefits package, the employee will need to fill out the necessary paperwork such as retirement, life insurance, wellness programs, etc.
Put the employee on your payroll system and gather all necessary banking information.
If your company offers direct deposit, get a void check with the necessary information to set that up.

Having a new hire checklist in place helps ease the process of starting an employee off on the right foot with your company. You will find that the checklist needs to be modified and changed over time, but streamlining this process and having the accounting paper ready to go can save time and hassle on an employee’s first day. When the process is perfected, you can delegate this task to another employee to take care of so you can start with the actual job training.

Small Business Payroll 101: The 1099-MISC Explained

In our last post, we demystified the elusive W-2 Form received from employers for wages earned on the job. However, non-employees who do contract work for a company will receive a Form 1099-Misc instead of a W-2.

Like the W-2, the 1099-Misc Form is an IRS form used for tax purposes only. This form reports miscellaneous payments to individuals for a calendar year. The IRS refers to 1099s as “information returns.”

The person or company who pays you to do the contract work is responsible for filling out the appropriate 1099 form and sending it to you by January 31^st of each year. If you earned more than $600 from a person or company, you should receive a 1099-Misc.

When you prepare your income tax return for the year, you are required to report all income showing on the 1099 forms you received and pay income tax on these amounts. If you did work for a company or individual and did not receive a Form 1099-Misc from them, you are still required to report the income to the IRS as self-employment income.

1099 Forms are also issued for other reporting requirements such as: acquisition or abandonment of secured property, proceeds from broker and barter exchange transactions, cancellation of debt, changes in corporate control and capital structure, dividends and distributions, certain government payments, interest income, and other miscellaneous type of income. Each 1099 form will have a letter or series of letters after the “1099” that indicates which type of form is being reported. (Ex. 1099-A, 1099-DIV, 1099-K, 1099-Misc).

All non-employees should receive their Form 1099-Misc by January 31^st, and an additional copy of the same 1099 is sent to the IRS by February 28^th.

Visit more posts in our Payroll 101 series:

What is Payroll?

Setting Your Own Salary as a Business Owner

The W-2 Explained

How Often Should You Pay Employees?

What are the Costs Associated with Payroll?

5 of the Best Benefits to Offer Employees

The Power of the Employee Pay Stub

Small Business Payroll 101: The W-2 Explained

You just got a new job. Congrats! Pat yourself on the back and start filling out that mountain of new hire paperwork. Sign here, sign there, date a few places, and you’re ready to start. Most people don’t understand exactly what it is they’re filling out, or what exactly the documents mean that they receive from their employer until they need to understand them.

If you are hired as a regular hourly or salaried employee, you’ll receive a Form W-2 from your employer by January 31^st of each year. If you’re self-employed or working as a contractor, you will receive a Form 1099 instead. Because of withholdings and insurance requirements, W-2s are really only useful for tax purposes. If any taxes (Social Security, Medicare, etc.) are withheld—and legally, they always should be—a W-2 will be issued.

You may not realize it, but in most cases, you cannot actually wait until April 15^th to pay your entire tax bill. If you’re self-employed, you know this from your estimated quarterly tax payments. However, if you are an employee who receives a W-2, your employer is actually taking care of this for you, based on the information you provide on your W-4. When that magical day, April 15^th comes along (and it always does), the numbers reported on your W-2 are subtracted from your tax bill. This helps you to determine whether you are owed a tax refund or if you need to make additional payments to the IRS.

The information on a W-2 is fairly straightforward. Let’s take a closer look at each of the boxes on your form.

Here’s a quick rundown of boxes on the left side of your W-2.

Box a: Your social security number. This information must be 100% accurate to properly file taxes with the IRS.

Box b: Your employer’s EIN. Basically, your employer’s EIN number is equivalent to your Social Security Number—it identifies their business individually. No two EINs are the same.

Box c: Your employer’s legal address. Whether or not that is the exact location you will be working does not matter so much as the legal address being the one reported on a W-2.

Box d: This box is for your employer’s payroll department. Sometimes this box is filled in; sometimes it is not.

Boxes e and f: This should contain your full name as it appears on your Social Security card. It also contains your mailing address. Again, whether or not you actually live in your tiny little PO Box is not as important as providing an address that you can receive mail. The USPS prefers that you do not use punctuation in your address.

If you notice that any of the above boxes are incorrect on your W-2, contact your employer immediately to make the changes. If the information on your W-2 is inaccurate or different from other information, the IRS will want to know why.

Now we’re getting to the good stuff. The boxes on the right side of your W-2 reflect information from your company, wages, and withholdings.

Box 1: This shows your total taxable wages, or, what you’ve earned before any withholdings have occurred. However, this number does not include elective contributions to retirement plans, pretax benefits, or payroll deductions like insurance. It’s not unusual for this number to be less than the amounts in boxes 2 and 3.

Box 2: This box reports the total amount of federal income taxes withheld from your pay during the entire year. This amount is determined by the information you provided on your form W-4 that indicates any exemptions and additional withholdings. You can adjust this number on your W-4 for next year if you feel that it is incorrect.

Box 3: This shows your total wages subject to Social Security tax. This number is figured before payroll deductions which means the amount could be either less or more than the number in box 1.

Box 4: Correlating with box 3, box 4 shows the total amount of Social Security taxes withheld for the entire year. Social Security taxes are calculated based on a flat rate of 6.2%. The maximum amount for Social Security withholdings in one year is $7049.40.

Box 5: This box indicates wages subject to Medicare taxes. Unlike Social Security wages, there is no cap for Medicare taxes and this is likely the largest number on your W-2.

Box 6: This shows the amount of Medicare taxes withheld for the year. Again, this is based on a flat rate of 1.45%. If an individual earns more than $200,000 in a year, regardless of filing status, they are taxed an additional .9%.

Box 7: This box represents tips reported to your employer. If you earned tips and didn’t report them to your employer, you still have to report them to the IRS.

Box 8: Allocated tips reported in this box are those that your employer attributed to you. This is considered income and is taxable.

Box 9: This box will be blank. There is no longer a reporting requirement for this box and it has not yet been removed from the form.

Box 10: This is where your employer reports any benefits paid on your behalf under a dependent care assistance program.

Box 11: This box is used to report amounts which have been distributed to you from your employer’s non-qualified deferred compensation plan. This is a taxable amount.

Box 12: Here you’ll find lots of codes that, to some, seem to be gibberish. Here’s a quick explanation of three of the most common codes you might see here:

Code D: Elective deferrals will general be include in boxes 3 and 5, even if they are excluded from wages in box 1.
Code DD: This amount is not taxable, but it reportable to the Affordable Care Act. It is the cost of the employer-sponsored health coverage.
Code P: This code is reported by your employer but not taxable to you. If reimbursments are non-qualified, they are reported as income in boxes 1, 3, and 5.

Box 13: This series of three boxes will be checked by your employer if your earnings are subject to Social Security and Medicare taxes but not federal income tax withholding. It will also be checked if you participated in a retirement plan during the year, or if you received sick pay under your employer’s third-party insurance.

Box 14: Your employers will report anything else here that doesn’t fall under any other categories on your W-2.

Box 15: This box includes your employers state and tax ID number.

Box 16: This box indicates the total amount of taxable wages for state tax purposes.

Box 17: If box 16 is filled in, box 17 will show the total amount of state income taxes withheld during the year.

Box 18: If you are subject to local, city, or other state income taxes, those will be reported here. You will need an additional W-2 form if your wages are subject to withholding in more than one state.

Box 19: The amount of withholding for box 18 will be reported in box 19.

Box 20: This box shows the name of the local, city, or state tax reported in box 19.

All W-2s should be received from your employer January 31^st of each year. The IRS requires that a copy of your W-2 form is attached to your tax documents when filing your income taxes.

Visit more posts in our Payroll 101 series:

What is Payroll?

The 1099-Misc Explained

Setting Your Own Salary as a Business Owner

How Often Should You Pay Employees?

What are the Costs Associated with Payroll?

5 of the Best Benefits to Offer Employees

The Power of the Employee Pay Stub

10 Ways To Use Your Tax Refund To Improve Your Work Life

If you’re among the 54% of Americans who will receive a tax return this year, you’ve probably already spent it ten times over in your head. However, if you’re not quite sure what to do with that bit of extra cash, here are a few ideas of how to put that money back into your business and improve your work life.

10 Ways To Use Your Tax Refund To Improve Your Work Life

Buy an ergonomic chair.
Have an occupational therapist set up your work area to your specific height.
Invest in a larger computer screen or side-by-side screens.
Buy an ergonomic split screen keyboard to go with your new screen.
Treat yourself to a foot rest.
Or, if you’re still sticking to your New Years resolution, buy an exercise bike pedal or pedometer to keep you moving, even at the office.
Grab an exercise ball to sit on to engage your core muscles while working at your desk.
If you’re a road warrior, have your car detailed.
Consolidate your rewards points and refund and plan a once in a lifetime trip with your family.
Take your employees to lunch.

How are you using your tax refund this year? Share with us on our Facebook page.

File Your Taxes Early to Protect Against Fraud and Identity Theft

Your taxes may not be due until April 15^th, but there are certainly benefits to filing early. One of them being greater protection against tax fraud and identity theft.

According to an estimate by the IRS, they paid over 5 billion dollars in fraudulent identity theft in 2013.

Basically, that means criminals use your name and Social Security number to file a false return and get your big whopper of a return in their pocket instead of yours. Obviously, this can’t be done if your taxes have already been filed so filing early is the easiest way to prevent this from happening to you.

Not expecting a return this year? You’re still at risk for identity theft. If a criminal gets ahold of your Social Security number, they can give it to an employer to avoid being taxed on wages, and the opposite effect can happen: you get stuck with the tax bill.

The risk of having your identity stolen during tax season is greater than the rest of the year, but still not something to lose sleep over. The IRS is constantly working to stop and prevent as many false returns as possible and they’re getting better and better at catching those sneaky little criminals before disaster strikes.

A new regulation put into place in the 2014 filing season is that only three refunds can be deposited into a single bank account. They’re also providing taxpayers with personal identification numbers–in addition to the Social Security number they’re required to provide–to prove their identity when filing tax returns. The number of taxpayers requesting these PIN numbers is nearly doubling every year.

Filing your taxes early can prevent the identity theft catastrophe and we’ll even reward you with cool Vyde gear. Send your tax documents to us by February 28^th and receive a $10 Amazon gift card and a trendy Vyde t-shirt.

FAQs about Filing Taxes Early to Protect Against Fraud and Identity Theft

1. Why should I file my taxes early? Filing taxes early offers greater protection against tax fraud and identity theft. Criminals may use your information to file false returns, but if you’ve already filed, it prevents them from doing so.

2. How does filing taxes early protect me from identity theft? By filing early, you reduce the risk of criminals using your Social Security number to file false returns and claim your refund. This proactive approach helps safeguard your identity and finances.

3. Am I still at risk for identity theft if I’m not expecting a tax return? Yes, even if you’re not expecting a refund, your Social Security number can still be used for fraudulent purposes. Criminals might use it to avoid taxes on wages, leaving you with unexpected tax bills.

4. How is the IRS combating tax fraud and identity theft? The IRS is actively implementing measures to prevent fraudulent returns. Initiatives include limiting the number of refunds to a single bank account and providing taxpayers with personal identification numbers for added security.

5. Are there any incentives for filing taxes early? Yes, some organizations offer incentives for early filers. For example, Vyde offers a $10 Amazon gift card and a trendy t-shirt for submitting tax documents by February 28th. Filing early not only protects against identity theft but also comes with rewards.

A Dozen Deductions for Your Small Business

It’s every business owner’s favorite time of year again! Tax season! Kidding…we know you may not love it as much as we do. But hey, if you’re already signed up with Vyde, we’ve got you covered.

Here are a dozen common and not-so-common tax deductions to get you started on your taxes:

Home Office. There are a few guidelines that go along with this deduction, but it is almost always worth the extra sorting and record keeping to get it right on your taxes. Uncle Sam says the space you claim as your “home office” must be devoted solely to your business and absolutely nothing else. If you sit on your couch and work on a laptop while watching TV, it won’t fly with the IRS. If you do have a legitimate home office, you can even write off a portion of your mortgage, insurance, and utility bills, based on the size of the space.

Office Furniture. 100% of office furniture, carpet, paint, and any improvements you’ve made to the space are tax deductible in the year you buy them. You can go that route or you can depreciate them over a course of seven years (meaning as their value lessens, you can still deduct a portion of the amount you bought them for each year.) You can use the IRS Tax Form 4562 to calculate these amounts.

Office Supplies. Even if you don’t have a home office, you’ve likely still bought supplies for your business. Think ink, paper, pens, scissors, tape, shipping supplies and notepads, highlighters, and the like. Keep your receipts; these things will help offset your taxable income.

Hardware and Software. There’s hardly a small business in existence that operates without a computer in this day and age. But this also includes other equipment like a camera, scanner, printer, laptop, webcam, Photoshop, Microsoft Office, Catch-up Bookkeeping, etc. Like office furniture, you can deduct the full amount of these things up front or you can depreciate them over five years.

Mileage. If you traveled at all for your business this year, you can deduct the costs incurred. You can either add up your mileage, parking, oil changes, tires, and other expenses and decide how much you use your car for business vs. personal use and then calculate your deduction; or you can take the standard mileage rate, which is simpler, and deduct .56 per mile for 2014.

Travel. Things get tricky tax-wise when you travel. It’s great to have a business trip/vacation, but you have to be careful. Hotel stays are 100% deductible (live it up!), but eating out is only 50% deductible (McDonald’s it is!). The cost of travel—airplane tickets, train rides, tips for a taxi driver are all 100% deductible as well.

Client Gifts. If you were an especially generous business owner this year, take those client gift receipts and use them to your advantage. The IRS allows you to deduct up to $25 per client in gifts.

Phone Charges. If you use your cell phone for business, you can claim that as a business expense. If you use your phone 50% of the time for business, you can deduct 50% of your monthly bill.

Advertising and Marketing. If you spent any money at all on advertising your business and its services, you can deduct those expenses. These usually include business cards, promotional flyers/campaigns, yellow page ads, graphic design services, marketing services, Internet ads, and the like. You can also deduct promotion costs for publicity, like sponsoring a local sports team.

Professional Fees. Accountants, lawyers, consultations, etc. are all tax deductible.

Service Fees. If you sell goods in an online story like Etsy or use Paypal to receive payments, all of those fees are tax deductible. This also includes bank fees, credit card fees, and check deposit fees.

Educational Expenses. If you took a course or bought research material to learn more about your industry, these fees are 100% tax deductible. Also consider books, manuals, local college courses, seminars, and professional publications that you may have purchased within the last year.

What tax deductions are most useful to your business? We’d love for you to share them with us!

Resources

Category: Tax Forms