The Tax Cuts and Jobs Act (TCJA) was signed into law in late December 2017, and this major tax reform will affect both business and individuals. The tax preparation experts at Sean Core CPA can help you understand these reforms and get ready for the upcoming tax season.
Learn How 2018 Tax Reforms Will Impact Your Taxes
The Internal Revenue Service has just published new information about how the TJCA will affect individuals and families, detailing what’s changed in the federal tax return you will be filing in 2019. You can read this IRS publication here.
The tax reforms are quite substantial, requiring the creation or revision of over 400 tax forms, instructions and publications for the upcoming tax season, which is more than twice the number of forms usually needing attention. It may be difficult for you to absorb these many changes, but our tax team can help!
Will You Pay Less Tax in 2018?
The TJCA was designed to create new jobs and boost the economy and should mean a lower tax bill and easier filing for many. In fact, you may have already seen an increase in your paycheck as the IRS has recommended that companies adjust their withholding to reflect the new tax rates. With the doubling of the standard deduction (the preset amount you can take off your taxable income) and the increased child tax credit you may be looking at a substantially lower rate of taxation.
If you are self-employed the picture may be even rosier, with a new benefit that can cut your tax bill by up to 20% and other tax adjustments for small business owners. Ask our tax professionals about 2018 tax law changes affecting the self-employed.
The unprecedented number of tax law changes may make it difficult for you to file this year, or at least to file your return on time while incorporating this slew of updates. It just makes sense to get professional help – our tax experts have been helping people and businesses in Mesa, Chandler, Tempe, across Arizona and further since 2005. Our team has collectively over 45 years’ experience providing top quality accounting, bookkeeping and tax work.
If you are looking for a Phoenix area CPA who understands how these 2018 tax reforms will affect both individuals and small-to-medium sized businesses in Arizona, please contact Sean Core CPA.
Reminder: if you requested an extension earlier this year, your new filing deadline, October 15th, is fast approaching!. If you haven’t taken care of your 2017 taxes yet it’s time to get that task back on your radar.
In light of the looming deadline, we wanted to take a moment to share these tips for extension filers.
Just get something filed.
Many of our clients file extensions because they can’t get the paperwork they need quickly enough to file an accurate return by April 15th. If this is the boat you’re in wanting to wait seems intuitive, but you can’t always do it and meet the deadline as well. When you don’t file on time, you open yourself up to failure-to-file penalties.
When this happens, file a return, even if it’s not going to be 100% accurate. A new clock will start ticking. You’ll have 3 years to file amended returns, which will give you plenty of time to get the rest of the paperwork you need. Of course, we don’t recommend waiting all three years to get the amended returns handled.
Consider a last-minute SEP-IRA contribution.
Self-employed? The good news about filing an extension is you get another chance to make a last-minute deduction. You have until October 15th to contribute just a little more to your SEP-IRA, the retirement savings account type designed just for freelancers and contractors.
Consult with us about the amount which will give you the biggest benefit, then get it done. Be sure to use a check so you can write the year the contribution should be credited under on the check, and keep a copy for your records.
See also: 7 Common Tax Problems the Self-Employed Business Owner Should Avoid.
Get our help now…not in October.
When you file for an extension you can take care of your taxes any time between April 15th and October 15th. In fact, we recommend it. The point is getting some additional time, not giving yourself another stressful day to scramble over. Waiting until the last minute makes it easy to make mistakes, too.
In fact, if you’re using our accounting services to get your returns filed (and, if you’re the type of taxpayer who needs an extension, you really should be using us)… the time is right now to do so!
Some of our clients have even tighter deadline to deal with, and/or hire us for bookkeeping and payroll, so by mid-September we’ll be up to our elbows in returns. If you’re a new client we might not even be able to squeeze you in if you wait too long. And if you’re an existing client, wouldn’t it feel better to know your taxes are taken care of?
Chances are, if you’re self-employed, you’ve already heard about some major tax changes. While you’ve probably picked up on the buzz by way of the news or social media, there’s a lot of mystique around this recent upheaval.
The Tax Cuts and Jobs Act has certainly caused quite a bit of trepidation among business leaders of all sizes, particularly those who find themselves on the small business or self-employed side of the spectrum. You can still take certain tax deductions, but others are now out of the game.
So, how does all this change impact you as a self-employed business owner? Our Arizona business accountants are on the case!
Major Changes Arising from the 2018 Tax Cuts and Jobs Act
Self-employed business owners have a lot to look forward to when tax time rolls around again. Whether you file monthly, quarterly, or yearly statements with the government, there are a couple major changes that will likely affect your income in a positive way:
- Excluding Up to 20 Percent of Your Income from Taxes. As a self-employed business owner, you may be able to exclude up to 20 percent of your income from taxes. This idea is founded on the Qualified Business Income (QBI) Deduction, which was once only in place for the purpose of giving corporations tax breaks. As of the recent tax changes, you’re eligible for this deduction also, if you’re a sole proprietor, owner in a partnership, or investor in an S-corp. There are specific details related to this deduction, however, so it’s best to speak with a professional tax professional before you file.
- Enjoying a Nearly-Doubled Standard Deduction. The standard deduction is now $12,000 for single filers and $24,000 for married filers. That means you have to do a whole lot less receipt-keeping if you’re spending less than $12,000 (or $24,000, respectively, on itemized personal expenses.
Deductions that Ring True to Self-Employed Business Owners
Amidst the confusion, a lot of good has come out of these tax changes, at least as far as self-employed business owners are concerned.
- You Can Still Deduct Your Home Office. As long as your home desk is your principal place of employment, this deduction is all yours. It just can’t be used for any purpose other than business. Consult your tax professional if you’re unsure.
- You’re Still Afforded Mileage, Contract Labor Costs, Bank Fees, and Ad Expenses. The key here is to keep your receipts. Nothing has changed regarding the costs incurred for doing business. You just have to be able to backup your claims.
What to Watch Out for When Filing 2018 Self-Employment Taxes
Taxes have their pitfalls. (We’re sure you’re super surprised!) Here are a few things you should be aware of if you’re self-employed:
- You’ll Still Owe Self-Employment Tax. When you’re self-employed, the IRS sees you as both an employer and an employee. Double whammy! You’re responsible for both contributions to Medicare and Social Security from both sides, but you can write off the “employer contribution” portion.
- You’re No Longer Penalized for Not Having Healthcare. In the past, health insurance was once place self-employed people chose to forego in favor of saving cash. While you’re no longer penalized for not having health insurance, this is one expense you probably shouldn’t skimp on. You never know when you’ll need it.
No tax law is ever cut-and-dry, but recent changes in legislation are tilted toward small business owners and self-employed professionals. While this may change in the future, it certainly benefits you to seek professional tax advice to ensure you’re cashing in on the savings while they’re available.
If you are looking for a CPA in the Phoenix area who understands how these changes will affect Arizona small-to-medium sized businesses, please contact us.
Tax Due Dates for AZ Businesses
The 2018 tax year will bring with it several changes to the tax code. With the alterations, it is important to plan ahead for your business filings and individual taxes. This way, you can prepare yourself for different filing dates while ensuring you have the necessary monetary amounts covered (if you need to pay in). As a business owner in Arizona, here are important tax dates for 2018 each of you need to know.
January 16, 2018
Coming up quickly is your 2017 fourth quarter estimated tax payments. Whether you own a business or are self-employed, it is necessary to pay this quarterly amount. Make sure to have it postmarked no later than the 15th of January.
March 15th, 2018
Partnership and S Corp Business Tax Returns are due. You may file an extension which allows an additional 6 months to file.
April 17, 2018
Individual Taxes Due. So for business owners who are filing personal tax returns, this is the day their return is do. All tax returns must be postmarked by midnight on April 18, unless an extension has been submitted.
If you are applying for an extension for your individual return, it is also due on this day. Applying for an extension will extend the filing of your return until October 15 of 2018. However any taxes owed must be paid with the extensions.
C Corporation Business tax returns and taxes are due. An extension may be submitted to extend the filing of your business return until October 15 of 2018.
Additionally, your second quarter 2018 business estimates are due on this day.
June 15, 2018
Your second quarter business estimates are due on June 15, so make sure you have your paperwork and payments postmarked by June 15.
September 17, 2018
Your third quarter business estimates are due on September 17. Have everything postmarked by the end of the 17th.
Your Partnership and S Corp Business tax returns are due.
October 15, 2018
If you filed for an extension back in April for your personal tax returns, today is the day your extension is due. You need to make sure you have everything postmarked by the 15th.
January 15, 2019
This is the day your final fourth quarter business estimate payments are due.
Staying on top of your business tax returns is so important. As a business owner filing is a bit different, as you likely need to file quarterly. Plus, with the recent changes to the tax codes going into 2018, it is a good idea to give yourself a bit more time to file. This way, you can understand what is going on with your personal and business tax returns. Just make sure to stay on op on these dates as it will help you stay on top of both your IRS and your Arizona Department of Revenue tax returns.
Just remember, if you need help with your tax returns, have questions or would like to know more about the changes in the tax code, feel free to contact our office to help you with your business taxes or individual taxes, or send us an email at your earliest convenience.
If you filed for an extension for your corporate business tax return, the deadline of October 15th, 2017 is fast approaching. Typically, these returns and individual tax returns are due on the 15th of the fourth month following the tax year end, December 31st 2016 for individuals and most businesses. A six-month extension gave you until October 15th 2017. Schedule C sole proprietorships and single member LLC’s also have the luxury of waiting until October, with a six-month extension.
New Deadlines for Partnerships and LLCs
Beginning with the 2016 tax year filing in 2017, Partnerships and S-Corps filed on a form 1065 and form 1120s respectively, are required to file returns by March 15th. This provides the necessary time to send Schedule K-1 to business owners for filing on their personal returns.
If you were part of a partnership filing Form 1065, your deadline is September 15th if you filed an extension by March 15th. In case you missed this deadline, or if you have any questions about these or any other tax deadlines, contact Sean Core CPA PLLC, for tax and business services. We provide business tax services related to Individuals, S Corps, C Corps, LLCs and Partnerships, and filing of all required schedules including K1’s.
Sean Core CPA for a Wide Range of Tax and Business Services
Our small business focused accounting firm provides tax preparation services including payroll tax returns for federal and state withholding (940, 941, 943, and 944), all State Unemployment returns, sales tax, and property tax returns. Sean Core CPA provides personal attention to small business, with a wide range of business planning and financial services such as monthly bookkeeping with compilation of financial statements, and business tax services.
Sean Core CPA has been assisting small business owners in and around Mesa, AZ including businesses in Chandler, Scottsdale, Tempe and Phoenix with accurate and timely tax and business services that you can trust.
Never miss a tax deadline again! Contact Sean Core, CPA today to maximize your return regardless of your business structure. We have the knowledge and experience to reduce your tax debt and maximize your return with timely tax filings.
We have the tax and accounting experience and knowledge since we have worked with all types of individuals and business clients. We know how to ask the right questions and give you the right answers.