Spring Is Coming!!

and

So are Business Tax Returns & Extensions!

Business Extensions

We are busy preparing Corporate extensions. A few reminders:

Watch for an email from us to you with instructions on what you need to do.
ALL states have a license fee. This is NOT a penalty for filing an extension. The license fee is due each year for the corporate tax return filed in that state.
Why are you receiving an extension?
Many forms have not been approved yet (either at a federal or state level) for e-filing. Yes, you read that correctly. The IRS implemented new forms, and yet all approvals are not completed.
Some of you owe money for the profit-sharing piece of your business retirement plan. By filing an extension, you have additional time to pay the retirement $$ (by 9/15/22) even though it is deducted in 2021. A nice gift from the IRS, thank you very much.

This does NOT mean you will be audited. Some of us (most CPAs in our country) file extensions and statistics do not show a higher audit rate for those returns.

If your personal information has made its way to us, we do not expect to extend your personal returns unless there is missing tax information we need to complete your 1040 returns.

SC Peeps...

New rules allow an “active trade or business” (think dental practice, not rental) S corporation and/or partnership to pay the state taxes at the business level. This is a brand-new law and we discussed it in a previous Eblast. Only SC is allowing this. GA will allow taxes at the corporate level in 2022. Once again, stay tuned for NC. They are still down in the bunker trying to figure out how to get out. Sorry, but they are not a CPA’s friend at the moment. . .

We will be taking extra time to figure out if this benefits you taxwise. For those of you with taxable income, it saves you tax at the federal level (in 2022) and is the amount you would have paid on your personal return this year anyway. Obviously, it is more work for us, but it is a bigger tax savings for you! Going forward, you are allowed to deduct 100% of the payment in the 2022 federal business tax return. We will be sending out an example to show you how it works with the extension.

While you save taxes by paying the amount owed at the state business level, your corporation or partnership will also need to pay estimates during the 2022 tax year. We will be including the first estimate in the extension (which is due 4/15) so the amount may scare you. Please realize the three subsequent estimates (due 6/15, 9/15 and 1/15) will be much smaller.

We will be sending out reminders prior to each extension since this is a new and exciting experience for all of us.

Georgia and maybe NC, you are next (year).

K2/K3 Forms Update

The IRS has thrown in the flag this year (only) for all corporations and partnerships who are domestic businesses with no foreign investments. This applies to 99% of our clients. So we will not be waiting on that form, thank goodness.

2020 NC Amended Corporate Returns with PPP

We will be amending these returns as time permits. We appreciate your patience. We are happy the NC legislators decided to make these changes, which means more money for you (however, more processing time for us). Stay tuned for more updates.

Form 7203 Update

These forms apply to S Corporations but will be filed in the individual tax returns. The instructions were confusing for many CPAs, including Continuing Ed instructors. Because of the new rules, we may be contacting you once we prepare your individual tax returns. We want to share the love with you.

RING...RING...

As a reminder, we are limiting meetings and phone calls so we can focus on corporate and personal tax returns. We hope you understand that unless it’s an emergency, could you call us after April 15th?

IT'S TAX SEASON!!!