• March 2015 Tax Due Dates for Businesses and Business Owners

    26 February 2015
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    March 2015

    You may have April 15th on your mind, but there are some crucial due dates in March that may require your attention as a business owner. Be sure to get in touch with Dagley & Co. if you need help with any of the items listed here.

    March 2 – Payers of Gambling Winnings

    File Form 1096, Annual Summary and Transmittal of U.S. Information Returns, along with Copy A of all the Forms W-2G you issued for 2014. If you file Forms W-2G electronically, your due date for filing them with the IRS will be extended to March 31. The due date for giving the recipient these forms was February 2.

    March 2 –  Informational Returns Filing Due

    File information returns (Form 1099) and transmittal Forms 1096 for certain payments you made during 2014. There are different forms for different types of payments. These are government filing copies for the 1099s issued to service providers and others.

    March 2 – 2 All Employers

    File Form W-3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W-2 you issued for 2014. If you file Forms W-2 electronically, your due date for filing them with the SSA will be extended to March 31. The due date for giving the recipient these forms was February 2.

    March 2 – Large Food and Beverage Establishment Employers

    File Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips. Use Form 8027-T, Transmittal of Employer’s Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to March 31.

    March 16 –  S-Corporation Election

    File Form 2553, Election by a Small Business Corporation, to choose to be treated as an S corporation beginning with calendar year 2015. If Form 2553 is filed late, S treatment will begin with calendar year 2016.

    March 16 –  Electing Large Partnerships

    Provide each partner with a copy of Schedule K-1 (Form 1065-B), Partner’s Share of Income (Loss) From an Electing Large Partnership, or a substitute Schedule K-1. This due date applies even if the partnership requests an extension of time to file the Form 1065-B by filing Form 7004.

    March 16 – Social Security, Medicare and Withheld Income Tax

    If the monthly deposit rule applies, deposit the tax for payments in February.

    March 16 – Non-Payroll Withholding

    If the monthly deposit rule applies, deposit the tax for payments in February.

    March 16 – Corporations

    File a 2014 calendar year income tax return (Form 1120 or 1120-A) and pay any tax due. If you need an automatic 6-month extension of time to file the return, file Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information and Other Returns, and deposit what you estimate you owe. Filing this extension protects you from late filing penalties but not late payment penalties, so it is important that you estimate your liability and deposit it using the instructions on Form 7004.
    March 31 – Electronic Filing of Forms 1098, 1099 and W-2G

    If you file forms 1098, 1099, or W-2G electronically with the IRS, this is the final due date. This due date applies only if you file electronically (not paper forms). Otherwise, March 2 was the due date. The due date for giving the recipient these forms was February 2.

    March 31 – Electronic Filing of Forms W-2
    If you file forms W-2 for 2014 electronically with the IRS, this is the final due date. This due date applies only if you electronically file. Otherwise, the due date was March 2. The due date for giving the recipient these forms was February 2.

    March 31 – Large Food and Beverage Establishment Employers 

    If you file forms 8027 for 2014 electronically with the IRS, this is the final due date. This due date applies only if you file electronically. Otherwise, March 2 was the due date.

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  • Fast Tax Refunds: Get Your Tax Refund Faster With a Direct Deposit

    24 February 2015
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    money

    We know you want your tax refund as soon as possible, and you’ll be happy to know that you don’t need to wait around for a paper check. Have your federal (and state, if applicable) tax refund deposited directly into your bank account. Opting for a direct deposit is a secure and convenient way to get your money into your pocket more rapidly, and is something we at Dagley & Co. highly recommend to our clients.

    Why is direct deposit on your taxes better?

    • Speed: When combining e-file with direct deposit, the IRS will likely issue your refund in no more than 21 days.
    • Security: Direct deposit offers the most secure method of obtaining your refund. There is no check to lose. Each year, the U.S. Post Office returns thousands of refund checks to the IRS as undeliverable mail.

    Direct deposit eliminates undeliverable mail and is also the best way to guard against having a tax refund check stolen.

    • Easy: Simply provide this office with your bank routing number and account number when we prepare your return and you’ll receive your refund far more quickly than you would by check.
    • Convenience: The money goes directly into your bank account. You won’t have to make a special trip to the bank to deposit the money yourself.
    • Eligible Financial Accounts: You can direct your refund to any of your checking or savings accounts with a U.S. financial institution as long as your financial institution accepts direct deposits for that type of account and you provide valid routing and account numbers. Examples of savings accounts include: passbook savings, individual development accounts, individual retirement arrangements, health savings accounts, Archer MSAs, and Coverdell education savings accounts.
    • Multiple Options: You can deposit your refund into up to three financial accounts that are in the your name or your spouse’s name if it is a joint account. You can’t have part of the refund paid by paper check and part by direct deposit. With the split refund option, taxpayers can divide their refunds among as many as three checking or savings accounts at up to three different U.S. financial institutions. Check with your bank or other financial institution to make sure your direct deposit will be accepted.
    • Deposit Can’t Be to a Third Party’s Bank Account: To protect taxpayers from scammers, direct deposit tax refunds can only be deposited into an account or accounts owned by the taxpayer. Therefore, only provide your own account information and not account information belonging to a third party.
    • Fund Your IRA: You can even direct a refund into your IRA account.

    To set up a direct deposit, you will need to provide the bank routing number (9 digits) and your account number for each account into which you wish to make a deposit. Please have these numbers available at your appointment. 

    For more information regarding direct deposit of your tax refund and the split refund option, we would be happy to discuss your options with you at your tax appointment. Find our contact information at the bottom of this page before individual taxes are due on April 15.

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  • What To Do If You’re Missing a W-2 or 1099

    19 February 2015
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    paperwork

    Have you received all of your tax forms from your employers, like you W-2 and 1099 forms? These documents are essential for completing individual tax returns. You should receive a Form W-2: Wage and Tax Statement from all of your employers each year, or a 1099 from independent contracting gigs. Employers have until January 31 to provide or send you a 2014 W-2 earnings statement, either electronically or in paper form. If you have not received your W-2, which proves that taxes were taken out of your paychecks, follow these steps:

    1. Contact Dagley & Co. – If your appointment is in the near future, you will be advised whether to keep the appointment or change it to another time. Generally, when a W-2 or 1099 are missing, it is best to keep the appointment so that everything else for the return can be completed. You can then mail the missing document to the office or drop it off at a later date. That way, your return can be finished as soon as the W-2 or 1099 is available, which will speed up your refund, if you are receiving one.
    2. Contact Your Employer – Contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer due to an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for the employer to resend or re-issue the W-2.
    3. Contact the IRS – If you still have not received your W-2 by February 15, you can contact the IRS for assistance at 800-829-1040. However, we recommend that you hold off from contacting the IRS until you are certain that you will not be receiving a W-2 from the employer. If you do call the IRS, have the following information on hand:
    4. File Your Return – Even if you don’t receive a W-2, you are still required to file your tax return or to request a filing extension by April 15.
    • Employer’s name, address, city, and state, including zip code;
    • Your name, address, city, state, zip code, and Social Security number; and
    • An estimate of the wages you earned, the federal income tax withheld, and the period in which you worked for that employer. The estimate should be based on year-to-date information from your final pay stub, or your leave-and-earnings statement, if possible. This office can assist you with making the estimate.
    • If you anticipate that you will ultimately receive the missing W-2, this office can estimate your 2013 tax liability and file extensions for you. If you have a substantial refund coming, you may opt to have this office prepare a substitute W-2, enabling you to file without the W-2. Refunds for returns that include substitute W-2s can be delayed significantly while the IRS verifies the W-2 information.
    • If you don’t anticipate receiving the missing W-2, then this office can prepare a substitute W-2, enabling you to file your 2013 tax return.

    If a substitute W-2 is used and it is later determined that the information used to prepare the substitute W-2 was in error, an amended return may need to be prepared for you to file with the IRS and state tax agency, if applicable.

    Please call Dagley & Co. if you have questions or need assistance about missing W-2s, 1099s, or other tax documents.

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  • Tips For Customizing QuickBooks For Your Company’s Needs

    16 February 2015
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    Quickbooks

    Dagley & Co. has clients all over the world, and one of the tools that makes this easy is the wonderful, versatile accounting program we all know as Quickbooks. QuickBooks is ready to use when you install it. But with a few adjustments, you can change its settings to make it work the way your company needs it to.

    There are some features that all small businesses need in their accounting software. Everyone needs a Chart of Accounts and a good set of report templates. There must be tools to bill customers and to document income and expenses. Some companies need payroll management, and some need the ability to create purchase orders. These days, many businesses want to accept payments online.

    But what does your company need? It’s unlikely that you would use absolutely every feature that QuickBooks offers, but you need to make sure that every tool you want to use is set up properly.

    If you’ve been using QuickBooks for a while, you may have been directed to the Preferences window already (accessible by clicking on Edit | Preferences). If you’re just starting out with the software, it’s a good idea to acquaint yourself with the most important elements contained there. Here are some of them.

    figure 1

    Figure 1: QuickBooks’ Preferences window. Some features are already turned on or off by default, but you can change their status.

    Accounting
    Click on the Accounting tab in the left vertical pane, then on the Company Preferences tab. Here, QuickBooks wants to know whether you plan to use account numbers. It also offers the option to turn on class tracking, which lets you define classes like company locations or divisions, or salespeople. Not sure what you should do here? Please ask us.

    Desktop View
    Options here involve usability and visibility issues. Getting them right can save you time and frustration. For example, under the My Preferences tab, you can choose between a VIEW that displays only One Window, or one that keepsMultiple Windows open. Click on the Company Preferences tab to turn specific features – like Payroll and Sales Tax — on and off.

    Finance Charge
    Should you decide to apply Finance Charges to late payments, for example, please let us go over this feature with you. We’ll explain how it is set up and how it works in day-to-day accounting.

    Items & Inventory
    This is critical: you must visit this screen if you will be buying and selling products. First, you need to make sure that the box in front of Inventory and purchase orders are active has a check mark in it. If not, click in the box. Also important here: QuickBooks can maintain a real-time inventory level for each item you sell so that you neither run short nor waste money by stockpiling. Check the box in front of Quantity on Sales Orders if you want the software to include items that appear on sales orders in the count. Also, do you want a warning when you don’t have enough inventory to sell (as you’re filling out an invoice, for example)? We can explain the difference between Quantity on Hand and Quantity Available; it’s rather complex.

    Figure 2

    Figure 2: Some inventory concepts may be unfamiliar to you. If you’ll be buying and selling items, let us walk you through this section.

    Payroll & Employees
    Payroll is integrated with QuickBooks, but it’s so complex that it almost acts as another application. If you’re planning to take this on yourself, some training will be necessary.

    Reminders
    Unless you have a very simple business or an extraordinarily good memory, you’ll probably want Quickbooks to remind you when you need to complete certain tasks. Click Reminders | Company Preferences to see the lengthy list of events that QuickBooks supports, like Paychecks to Print, Inventory to Reorder, and Bills to Pay. You can have the software display either a summary or a list of what needs to be done, and you can specify how many days in advance you want to be alerted.

    Sales & Customers, Sales Tax, and Time & Expenses
    If your accounting workflow includes tasks in any of these areas, you’ll need to visit them to turn features on and make other preferences known.

    You probably won’t need to have absolutely every feature turned on from the start. But as your business grows and changes – and we hope it does – you can always revisit the Preferences window to let QuickBooks know about your new needs. We hope you’ll let us know, too.

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  • Retirement Savings: the Earlier One Starts, the Better

    16 February 2015
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    Retirement

    We know, we know: Most teenagers and young adults do not consider the long-term benefits of retirement savings. Their priorities for their earnings are more for today than that distant, and rarely considered, retirement. Yet contributions to a retirement plan early in life can enjoy years of growth and provide a substantial nest egg at retirement.

    Due to its long-term benefits of tax-free accumulation, a nondeductible Roth IRA may be the best option. During most individuals’ early working years, their income is usually at its lowest, allowing them to qualify for a Roth IRA at a time where the need for a tax deduction offered by other retirement plans is not important.

    Because retirement may not be their focus at that age, young adults may balk at having to give up their earnings. Parents, grandparents, or other individuals might consider funding all or part of the child’s Roth contribution. It could even be in the form of a birthday or holiday gift. Take, for example, a 17-year-old who has a summer job and earns $1,500. Although the child is not likely to make the contribution from his or her earnings, a parent could contribute any amount up to $1,500 to a Roth IRA for the child.*

    But keep in mind that young adults, like anyone else, must have earned income to establish a Roth IRA. Generally, earned income is income received from working, not through an investment vehicle. It can include income from full-time employment, income from a part-time job while attending school, summer employment, or even babysitting or yard work. The amount that can be contributed annually to an IRA is limited to the lesser of earned income or the current maximum of $5,500.

    Parents or other individuals who contribute the funds need to keep in mind that once the funds are in the child’s IRA account, the funds belong to the child. The child will be free to withdraw part or all of the funds at any time. If the child withdraws funds from the Roth IRA, the child will be liable for any early withdrawal tax liability.

    Consider what the value of a Roth IRA at age 65 would be for a 17-year-old who has funds contributed to his or her IRA every year through age 26 (a period of 10 years). The table below shows what the value will be at age 65 at various investment rates of return.

    Value of a Roth IRA
    Annual Contributions of $1,000 for 10 years beginning at age 17

    Investment Rate of Return 2%           4%           6%         8%
    Value at Age 65     $23,703  $55,449  $127,900  $291,401

    What may seem insignificant now can mean a lot at retirement. Individuals who are financially able to do so should consider making a gift that will last a lifetime. It could mean a comfortable retirement for your child, grandchild, favorite niece or nephew, or even an unrelated person who deserves the kind gesture.

    *Amounts contributed to an IRA on behalf of another person are nondeductible gifts by the donor and are counted toward the donor’s annual $14,000 (2014 and 2015 gift exclusion per done).

    If you would like more information about Roth IRAs or gifting contributions to a Roth on behalf of someone else, please contact us at Dagley & Co.

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  • Everything You Need To Know About President Obama’s 2016 Budget Proposal

    9 February 2015
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    Obama signing

    The President’s Fiscal Year 2016 Budget Proposal was just released and includes a number of tax proposals that would increase the taxes on higher-income taxpayers and provide more tax breaks for low- to middle-income taxpayers. The following are some highlights of the budget proposal that would impact individuals and small businesses, but remember these are proposals only. Congress has to discuss them and approve these measures before they’re put into action.

    Business Provisions

    • Section 179 Expensing – Would make the Sec. 179 expense cap $500,000 for 2015 (it is currently at $25,000, down from $500,000 in 2014). Would raise the expense cap to $1 million in 2016 and make the $1 million permanent with inflation adjustment for future years.
    • Cash Basis Accounting – Would expand use of the cash method of accounting to small businesses with less than $25 million in average annual gross receipts, estimated to apply to 99% of all businesses.
    • Qualified Small Business Stock – Would permanently extend the 100% exclusion on capital gains from sales of tax-qualified small business stock held by individuals for more than five years, and would eliminate the inclusion of excluded gain from the Alternative Minimum Tax.
    • Start-Up & Organizational Expenses – Would increase and consolidate the deduction for start-up and organizational expenditures.
    • Small Employer Health Insurance Credit – Would expand the credit for small employers to provide health insurance to apply to up to 50 (rather than 25) full-time equivalent employees, with phaseout between 20 and 50 employees (rather than between 10 and 25).
    • Mandatory Employer IRA Payroll Deductions Would require employers with 10 or more employees who don’t have a 401(k) plan to automatically enroll full-time and part-time employees in an optional IRA payroll deduction plan.

    Individual Provisions

    • Child Care – Would allow a credit of up to $3,000 (50% credit for up to $6,000 of expenses per child) for each child under the age of 5 to enable gainful employment of the parent(s) or other qualified taxpayer. The regular credit for those ages 5 through 12 would also begin to phase out at $120,000 (instead of $15,000 under current law). Flexible spending accounts for child care would be eliminated.
    • Second Earner Tax Credit – Would provide a new tax credit up to $500 (5% of the first $10,000 of earnings for the lower-earning spouse) for joint filers with two wage earners. The credit would begin to phase out at income of $120,000 and would be fully phased out when family income reaches $210,000. It is estimated that this new credit would benefit 24 million joint filers.
    • Earned Income Tax Credit (EITC) Would double the EITC for workers without a child and increase the credit applicability for childless workers with earnings up to 150% of the federal poverty level (currently about 125%). Would expand the applicability of the EITC to workers age 21 to 66 (currently 24 to 64).
    • Education Tax Benefits – The American Opportunity Tax Credit (AOTC) would be expanded to cover five years of post-secondary education, and the current $2,500 tax credit would be adjusted for inflation. The refundable portion of the AOTC would be increased to $1,500. Part-time students would be eligible for a $1,250 AOTC (up to $750 refundable). Duplicative and less effective provisions, including the Lifetime Learning Credit, the tuition and fees deduction, the student loan interest deduction (for new borrowers), and Coverdell accounts (for new contributions) would be repealed or allowed to expire. The credit would also be better coordinated with Pell Grants.
    • Top Capital Gains Rate – Would raise the top effective capital gains and qualified dividends tax rate to 28% (24.2% plus the 3.8% net investment income tax). For couples, the 28% rate would apply where income is more than $500,000 annually.
    • Itemized Deductions – Would limit to 28% the value of itemized deductions and other tax preferences for married taxpayers with incomes over $250,000 and individual taxpayers with income over $200,000. The limit would apply to all itemized deductions as well as other tax benefits, such as tax-exempt interest and tax exclusions for retirement contributions and employer-sponsored health insurance.
    • Limit Retirement Account Contributions Would prohibit contributions to and accruals of additional benefits in tax-preferred retirement plans and IRAs once balances are about $3.4 million, which is about enough to provide an annual income of $210,000 in retirement.
    • Buffett Rule – Would implement the “Buffett Rule.” This rule, which is a carryover from prior year budget proposals, would require the wealthy to pay at least a 30% effective tax rate.

    Gift & Inheritance Tax Provisions

    • Inheritances and Gifts – Would eliminate the current step-up in tax basis at death and require payment of capital gains tax on the increase in value of securities at the time they are inherited. Generally, a $100,000-per-person, portable-between-spouses exclusion would apply for inherited appreciated assets, along with exceptions for surviving spouses, small businesses, charities, and residences, among others. For couples, no tax would be due until the death of the second spouse. No tax would be due on inherited small, family-owned-and-operated businesses unless and until the business was sold, and any closely held business would have the option to pay tax on gains over 15 years. Couples would have an additional $500,000 exemption for personal residences ($250,000 per individual), with this exemption also automatically portable between spouses. Tangible personal property other than expensive art and similar collectibles – e.g., bequests or gifts of clothing, furniture, and small family heirlooms – would be tax-exempt.
    • Inheritance and Gift Tax – Would reinstate the prior, 2009, estate and gift tax rates with lower exclusions (generally at 45% at $3.5 million for estates and $1 million for gifts).

    These are all proposals by the Obama administration and must be approved by Congress. The information is being passed along so you will have an idea of what might happen in the future.

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  • February Tax Due Dates for Businesses

    6 February 2015
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    Deadline

    Because April 15 is a big tax deadline for individual taxes, there are a lot of deadlines businesses must adhere to this month so everything goes smoothly. February is the time for entrepreneurs and business owners to give all tax paperwork to employees so everyone can hit the IRS deadlines on time.

    If you’re a business owner and you think you’ll have difficulty hitting these important February deadlines, get in touch with us at Dagley & Co. for assistance.

    February 2 – 1099s Due To Service Providers

    If you are a business or rental property owner and paid $600 or more for the services of individuals (other than employees) during a tax year, you are required to provide Form 1099 to those workers by February 2nd. “Services” can mean everything from labor, professional fees and materials, to rents on property. In order to avoid a penalty, copies of the 1099s need to be sent to the IRS by March 2, 2015 (March 31, 2015 if filed electronically). They must be submitted on optically scannable (OCR) forms. This firm prepares 1099s in OCR format for submission to the IRS with the 1096 submittal form. This service provides both recipient and file copies for your records. Please call this office for preparation assistance.

    Payments that may be covered include the following:

    • Cash payments for fish (or other aquatic life) purchased from anyone engaged in the trade or business of catching fish
    • Compensation for workers who are not considered employees (including fishing boat proceeds to crew members)
    • Dividends and other corporate distributions
    • Interest
    • Amounts paid in real estate transactions
    • Rent
    • Royalties
    • Amounts paid in broker and barter exchange transactions
    • Payments to attorneys
    • Payments of Indian gaming profits to tribal members
    • Profit-sharing distributions
    • Retirement plan distributions
    • Original issue discount
    • Prizes and awards
    • Medical and health care payments
    • Debt cancellation (treated as payment to debtor)
    • Cash payments over $10

    February 2 – W-2 Due to All Employees

    All employers need to give copies of the W-2 form for 2014 to their employees. If an employee agreed to receive their W-2 form electronically, post it on a website and notify the employee of the posting.

    February 2 – File Form 941 and Deposit Any Undeposited Tax

    File Form 941 for the fourth quarter of 2014. Deposit any undeposited Social Security, Medicare and withheld income tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return.

    February 2 – File Form 943

    All farm employers should file Form 943 to report Social Security, Medicare taxes and withheld income tax for 2014. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the year in full and on time, you have until February 10 to file the return.

    February 2 – W-2G Due from Payers of Gambling Winnings

    If you paid either reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of the W-2G form for 2014.

    February 2 – File Form 940 – Federal Unemployment Tax

    File Form 940 (or 940-EZ) for 2014. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you deposited the tax for the year in full and on time, you have until February 10 to file the return.

    February 2 – File Form 945

    File Form 945 to report income tax withheld for 2014 on all non-payroll items, including back-up withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the year in full and on time, you have until February 10 to file the return.

    February 10 – Non-Payroll Taxes

    File Form 945 to report income tax withheld for 2014 on all non-payroll items. This due date applies only if you deposited the tax for the year in full and on time.

    February 10 – Social Security, Medicare and Withheld Income Tax

    File Form 941 for the fourth quarter of 2014. This due date applies only if you deposited the tax for the quarter in full and on time.

    February 10 – Certain Small Employers

    File Form 944 to report Social Security and Medicare taxes and withheld income tax for 2014. This due date applies only if you deposited the tax for the year in full and on time.

    February 10 – Federal Unemployment Tax

    File Form 940 for 2014. This due date applies only if you deposited the tax for the year in full and on time.

    February 17 – Social Security, Medicare and Withheld Income Tax

    If the monthly deposit rule applies, deposit the tax for payments in January.

    February 17 – Non-Payroll Withholding

    If the monthly deposit rule applies, deposit the tax for payments in January.

    February 17 – All Employers

    Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2014, but did not give you a new Form W-4 to continue the exemption this year.

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  • February 2015 Tax Deadlines for Individuals

    4 February 2015
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    taxes

    It’s the first quarter of 2015, which means we’re getting in the swing of tax season and getting all of our paperwork together before April deadlines. With that said, here are a few dates to keep in mind for February:

    February 2 – Tax Appointment

    If you don’t already have an appointment scheduled with someone at Dagley & Co., you should call or email to make an appointment that is convenient for you. You can find our contact information at the bottom of this webpage.

    February 2 – File 2014 Return to Avoid Penalty for Not Making 4th Quarter Estimated Payment

    If you file your prior year’s return and pay any tax due by this date, you need not make the 4th Quarter Estimated Tax Payment (January calendar).

    February 10 – Report Tips to Employer

    If you are an employee who works for tips and received more than $20 in tips during January, you are required to report them to your employer on IRS Form 4070 no later than February 10.

    Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

    February 17 – Last Date to Claim Exemption from Withholding

    If you claimed an exemption from income tax withholding last year on the Form W-4 you gave your employer, you must file a new Form W-4 by this date to continue your exemption for another year.

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