Benjamin Franklin said there are only two certainties in this world, and we all know one of them is taxes! Tax season is a perpetual cycle that requires careful planning and timely action, both for individual taxpayers and business owners. However, it’s best to think about taxes year-round, not just during tax season. Staying on top of tax deadlines is crucial if you want to avoid penalties and ensure a smooth tax-filing process. In this article, we’ll discuss important dates on the year-round tax planning calendar to help you navigate tax obligations efficiently and effectively.
March: The Prelude to Tax Season
As the year gains momentum, March serves as an opportune time to begin your tax planning efforts if you haven’t done so already. Here’s where to begin:
- Review and Organize Financial Records
Before the tax season intensifies, take this month to gather and organize all necessary financial records. This includes income statements, expense receipts, and relevant documents required for deductions and credits.
- File Business Taxes (Partnerships and S Corporations)
Businesses structured as partnerships or S corporations must file their tax returns (Form 1065 or Form 1120-S) by March 15th. Ensure your financial records are accurate and complete to facilitate a smooth filing process.
April: Individual Tax Filing and IRA Contributions
April is synonymous with individual tax filing, and it can make you sweat if you aren’t prepared – another smart reason to practice year-round tax planning. Here are the crucial deadlines to remember for this month:
- Individual Tax Filing Deadline
Individual taxpayers must file their federal income tax returns (Form 1040) by the traditional April 15th deadline. If you need more time, consider filing for an extension, which grants an additional six months to submit your return.
- IRA Contribution Deadline
April 15th also marks the deadline for contributing to traditional and Roth IRAs for the previous tax year. Review your contributions and, if you haven’t maxed them out yet, take advantage of this opportunity to maximize your retirement savings and potentially reduce your tax liability, too.
June: Estimated Tax Payments and Quarterly Filings
Summer brings the need for estimated tax payments and quarterly filings for some businesses.
- Estimated Tax Payment (Individuals)
If you earn income that isn’t subject to withholding (such as self-employment income from freelancing or consulting or rental income), June 15th is the due date for making your second estimated tax payment for the year.
- Quarterly Payroll Tax Filings (Businesses)
Businesses with employees must file quarterly payroll tax returns (Form 941) by the end of June. Ensure accurate reporting of wages, withholdings, and other employment-related details.
September: Extended Individual Tax Filing Deadline
As mentioned above, taxpayers can file for an extension if they aren’t ready to file their taxes in April. September brings a second chance for individuals who requested a tax extension earlier in the year.
- Extended Individual Tax Filing Deadline
Taxpayers who filed for an extension have until September 15th to submit their federal income tax returns. Make the most of this extension by thoroughly reviewing your return and seeking potential deductions.
October: Retirement Account Deadlines
As the year winds down, take note of critical retirement account deadlines. They can play an important role in your year-round tax-planning efforts:
- Retirement Account Contributions
For self-employed individuals and small business owners, October 15th is the deadline to establish and fund a Simplified Employee Pension (SEP) IRA for the previous tax year.
December: Year-End Tax Planning and Charitable Contributions
As the calendar year concludes, your tax planning work may not be done. Consider these steps before the New Year arrives:
- Year-End Tax Planning Considerations
Engage in year-end tax planning to assess your current financial situation, explore potential tax-saving strategies, and make any final contributions to retirement accounts.
- Charitable Contributions
December is an excellent time to make charitable contributions for potential tax deductions. Ensure donations are made by December 31st to qualify for the current tax year. Note that many non-profit organizations must have the money in hand by December 31st – not simply postmarked by that date – so be sure you meet the deadlines of your favorite charities.
Are You Following a Year-Round Tax Planning Calendar?
Navigating the complex world of tax deadlines requires diligence and strategic planning. By staying organized and adhering to key deadlines, you can optimize your tax strategy, minimize your tax burden, and achieve financial peace of mind, too.
Remember, tax laws and regulations may change, so it’s crucial to stay informed and consult with a qualified tax advisor or financial advisor to tailor your tax planning to your unique financial circumstances. If you’d like to meet with a member of the B.A. Schrock team to discuss your personal financial situation and learn how we can assist with your year-round tax planning efforts, please reach out to schedule a meeting today.