Corporate and Individual returns update

New for 2015

Individual Standard Deductions Single or Married Filing Single = $6,300; Married Filing Jointly or Qualified Widower = $12,600; Head of Household = $9,250.00. Additional age 65 or older, blind per person per event Married Filing Jointly, Qualifying Widower, or Married filing = $1,200.00; Single or Head of Household $1,500.00. Personal Exemptions $3,950.00.

Standard Mileage Rates; business $.575; charitable $.14; medical and moving $.23

Social Security earning subject to tax = $118,500. Medicare tax No Limit. Social Security Maximum Tax Employee $7,049. Self-Employed $14,099.; Max. Medicare Tax no limit. Medicare tax rate: Employee $1.45%; Self-Employed 2.90%, Earnings needed for one quarter of coverage $1,160. Maximum earnings and still receive full Social Security is under full retirement = $15,120; Year of full year retirement $40,080; Full retirement age No limit. $1 in benefits is withheld for every $2.00 in earnings above limit. Applies only to earnings for prior to attaining full retirement. $1 in benefits withheld for every $3 in earnings above limit.   

Reporting cost of health insurance on W2. The Affordable Care Act requires employers  to report  the cost of coverage under an employer sponsored group health plan on the employee's form W2.

Extension of time to file - File form 7004 Application for Automatic Extension of Time to File a Corporation Income Tax Return to request a six month extension of time to file a return. A 4868 is required to file an extension for time to file a personal return. 

Penalties for late filing - a penalty of 5% of unpaid tax for each month or part of a month the return is late up to a maximum of 25% of the unpaid tax. The late payment penalties will not be imposed if the corporation has reasonable cause for the failure to file or pay tax. Attach a statement to the return explaining the reasonable cause.

Filing Requirements - All domestic corporations in existence for any part of a taxable year (including corporations in bankruptcy) must file a return whether or not the corporation has any taxable income, unless the corporation is exempt under IRC section 501.

Filing Deadlines - The filing deadline for Form 1120 (and 1120S) is the 15th day of the third month after the end of the corporation's tax year (March 15 for calendar year corporations). Time to file a personal return is April 15, you can get an extension of time for individuals is October 15, 2014. An extension of time to file a personal return is NOT an extension of paying your tax bill. A payment must be made with the extension or penalties and interest will accrue. 

Electronic Filing - Corporations can generally e-file income tax returns with related forms, schedules, and attachments, as well as extensions, employment tax and other information returns.

Failure to comply with e-file requirements - if a corporation taxpayer fails to e-file an income tax return when required to do so by regulations the IRS may determine that the taxpayer failed to file the return. The taxpayer then becomes subject to the IRC section 6651 additions to tax, typically resulting in  monetary penalties on the amount of underpayment.  Additionally any return not in compliance with the e-filing requirement will be considered to not have been timely filed rendering any elections invalid.

Small business health care tax credit - Effective for tax years after 2009 a tax credit is allowed for a small employer to purchase health insurance for its employees. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. The credit is targeted to help small business and tax-exempt organizations that employ moderate and lower income workers.


Partnership returns are due on the 15th day of the fourth month following the end of the tax year, which is April 15 for calendar year partnerships.

Automatic six month extension of time to file is granted by filing a form 7004.
Failure to file form 1065 returns is $195.00 per month (or part month) times the number of partners up to 12 months.

Husband/Wife Partnerships - Generally, if spouses jointly own and operate an unincorporated business and share the profits and losses, they are partners in a partnership and must file For 1065.
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