Dear Mehnaz,
Greetings!
It is now end of July of 2021; Please take this as just a friendly reminder on the tax filing due date. We are excited to help you fulfill your tax filing needs!
FBAR Filing
The IRS has granted everyone an automatic extension of time to file the FBAR, which pushes the due date back to October 15, 2021. However, we recommend filing as soon as possible so nobody forgets about it.
This is an information-only filing that does not effect your tax returns. If you have/had foreign bank account(s) that exceeded a total of $10,000 USD at any time during 2020, you are required to file.
If you do not have foreign bank accounts that exceeded $10,000 USD at any time during 2020, there is no reporting requirement for you.
If you are unsure whether this applies to you or not, you can always send us an email or give us a call.
*Please note*
The IRS is becoming more and more strict on FBAR filing. This is not an optional filing; it is required by the IRS. Failure to report foreign bank accounts that exceed $10,000 total can have severe consequences.
The IRS can penalize individuals who fail to report their foreign accounts.
WARNING: Failing to file an FBAR can carry a civil penalty of $10,000 for each non-willful violation. But if your violation is found to be willful, the penalty is the greater of $100,000 or 50 percent of the amount in the account for each violation-and each year you didn't file is a separate violation.
FBAR Details
Here is a list of the details needed for FBAR filing:
- Name & address of financial institution
- Type of account: Bank, Security, Other
- Account number
- Maximum account value in 2020
- Is it your account, your spouse's account, or a joint account?
We highly recommend starting on this process immediately in case you have any further questions or concerns.
Similar to tax filing, we can gather all necessary information via email or phone correspondence
Regarding Corporate Tax Filing
The extended deadline for filing corporate and partnership returns is Wednesday, September 15th.
Small businesses need to gather financial statements such as a profit and loss statement and a balance sheet. We may ask to see additional documents, such as copies of payroll returns, confirmations of retirement plan contributions, or other supporting documents....
The IRS sometimes audits small corporations and partnerships. Having been through a few small business audits myself, I know that good documentation is essential. When looking over your return with an accountant, ask yourself what might be missing, or what might be some risk factors.
The penalties for filing a corporate or partnership return late can quickly get expensive. And by late, I mean filing after the extended deadline (which is September 15th, 2021, for year 2020 returns). The IRS can charge a penalty of $195 per month per shareholder or partner for S-corporation and partnership returns.
October 15th, 2021
This is the due date for you to file your 2020 individual income tax return - federal and states.
Possible Consequences of Not Filing a Return
Failure to file a US income tax return may result in a very unfavorable outcome.
The IRS can impose failure to file penalties, failure to pay penalties, interest & fees.
The United States Customs and Immigration Services may review your tax returns to verify that you are compliant with your US income tax obligations before issuing a US work visa.
Finally, as the year is partway through it is time to start looking to the future. If you have found yourself in a unique tax situation and concerned on how that will effect your tax for the following year. Let us know; we would be happy to go over your taxes with you. If any of the following events apply to you I would encourage you to reach out to us so that we can go though it with you.
- Bought or sold you house
- Sold a large amount of stocks or bonds
- Received any income as an independent contracted or freelancer
For your convenience, we are available though email and phone calls. For those who wish for a more person touch we are now available for zoom meeting, we will just need you to request a meeting that works best for you. We at Indy tax look forward to working with you on all your tax needs. I hope you have a good rest of your year and look forward seeing you next year.
