Featured Articles for June 2021
Tax Considerations When Selling Your Small Business
If you’ve decided to sell your business, you may be looking forward to lazy days ahead with plenty of cash on hand. The reality, however, is that without a tax planning strategy in place, you could be liable for capital gains and other taxes – leaving you with far less cash than you anticipated.
Changing Jobs? Don’t Forget About Your 401(k)
One of the most important questions you face when changing jobs is what to do with the money in your 401(k) account. Making the wrong move could cost you thousands of dollars or more in taxes and lower returns.
Tips to Help You Figure Out if Your Gift is Taxable
If you’ve given money or property to someone as a gift, you may owe federal gift tax. There are, however, exceptions.
Expat Compliance With US Tax Filing Obligations
If you’re an expat who has relinquished – or intends to relinquish – your US citizenship but still has US tax filing obligations (including owing back taxes), you’ll be relieved to know there are IRS procedures in place that allow you to come into compliance and receive relief for any back taxes owed.
What are Estimated Tax Payments?
Estimated tax is the tax paid on income not subject to withholding, such as income from self-employment, interest and dividends, rent, prizes and awards, and gains from the sale of assets.
Tax Due Dates
Employees – who work for tips. If you received $20 or more in tips during May, report them to your employer. You can use Form 4070.
Individuals – If you are a U.S. citizen or resident alien living and working (or on military duty) outside the United States and Puerto Rico, file Form 1040 or Form 1040-SR and pay any tax, interest, and penalties due. If you want additional time to file your return, file Form 4868 to obtain 4 additional months to file. Then file Form 1040 or Form 1040-SR by October 15.
However, if you are a participant in a combat zone you may be able to further extend the filing deadline.
Individuals – Make a payment of your 2021 estimated tax if you are not paying your income tax for the year through withholding (or will not pay in enough tax that way). Use Form 1040-ES. This is the second installment date for estimated tax in 2021.
Corporations – Deposit the second installment of estimated income tax for 2021. A worksheet, Form 1120-W, is available to help you estimate your tax for the year.
Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in May.
Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in May.
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