April 10 - Report Tips to Employer

If you are an employee who works for tips and got more than $20 in March, you must report them to your employer on IRS Form 4070 by April 10.  Your employer is obligated to deduct FICA and income tax withholding for these tips from your normal pay.  If your regular earnings are inadequate to pay FICA and tax withholding, your employer will record the uncollected withholding in box 8 of your annual W-2.  When you submit your annual return, you will be obligated to pay any uncollected withholdings.

April 15 - Taxpayers with Foreign Financial Interests

A U.S. citizen or resident, or a person doing business in the United States, must submit Form FinCEN 114 if they have a financial interest in, or signatory or other power over, any foreign financial accounts (bank, securities, or other forms of financial accounts) in another nation.  The form must be submitted online; hardcopy forms are not accepted.  The form must be submitted with the Treasury Department (not the IRS) by April 15, 2025, for 2024.  An extension of up to 6 months is automatically granted.  This reporting obligation is only applicable if the total value of these bank assets reaches $10,000 at any point in 2024.  Contact our office for further information and help with the form.

April 15 - Individual Tax Returns Due

File a 2024 income tax return (Form 1040 or 1040-SR) and pay any taxes owed.  If you need an automatic six-month extension of time to submit your return, please contact this office.

Caution: The extension provides you until October 15, 2025 to submit your 20241040 or 1040-SR return without incurring the late filing penalty.  However, it does not waive the late payment penalty; hence, if you owe money, the late payment penalty might be significant, so you should file as soon as possible to reduce that penalty.  In addition, you will be required to pay interest from the initial due date until the tax is paid.  If you get a refund, there is no penalty; nevertheless, you are essentially giving the government a free loan since they will only pay interest after 45 days after filing the return.  If you are unable to submit by the April 15 deadline, please contact our office to discuss your specific circumstances.

April 15 - Household Employer Return Due

If you paid a household employee cash wages of $2,700 or more in 2024, you must submit Schedule H.  If you are required to submit a federal income tax return (Form 1040 or 1040-SR), include Schedule H and include any household employment taxes.  If you paid total cash salaries of $1,000 or more to home workers in any calendar quarter of 2023 or 2024, report the federal unemployment tax (FUTA) on Schedule H.  Also, record any income tax withheld from your household workers.  For further information, please contact this office.

April 15 - Estimated Tax Payment Due (Individuals)

It's time to pay your first quarter anticipated tax installment for the 2025 tax year.  Our tax system is a "pay-as-you-earn" model.  To help taxpayers comply with the "pay-as-you-earn" rule, the government has given numerous options.  This includes:

• Payroll withholding for employees
• Pension withholding for retirees;
• Estimated tax payments for self-employed people and those with other sources of income not subject to withholding.

When a taxpayer fails to prepay a safe harbor (minimum) amount, they may face an underpayment penalty.  The penalty is equivalent to the federal short-term rate + 3 percentage points, and it is assessed quarterly.

The federal tax code does provide options to avoid the underpayment penalty.  If the underpayment is under $1,000 (the "de minimis amount"), no penalty is imposed.  In addition, the legislation permits "safe harbor" prepayments.  There are two safe harbors.

• The initial safe harbor focuses on the current year's tax payable. If your payments equal or surpass 90% of what is outstanding in the current year, you may avoid the penalty.
• The second safe harbor considers the tax payable in the previous tax year.  This safe harbor typically covers 100% of the preceding year's tax due.  However, for taxpayers with AGIs more than $150,000 ($75,000 for married taxpayers filing separately), the previous year's safe harbor is 110%.

For example , suppose your annual tax is $10,000 and you have $5,600 in prepayments.  As a consequence, you owe an extra $4,400 on your tax return.  To determine if you owe a penalty, check to see whether you fall under the first safe harbor exemption.  Because 90% of $10,000 equals $9,000, your prepayments fell short of the threshold.  You cannot escape the penalty under this exemption.

However, in the above situation, the safe harbor may still apply.  Assume that your previous year's tax was $5,000.  Because you prepaid $5,600, which is more than 110% of the previous year's tax (110% = $5,500), you are eligible for this safe harbor and may avoid the penalty.

This example emphasizes the significance of making enough prepayments, particularly if you have a significant increase in income.  This is typical when there is a significant gain from the sale of stock or property, when substantial bonuses are given, when a taxpayer retires, and so on.  The safe harbor exemption to the penalty requires timely payment of each necessary estimated tax installment.  If you have any queries about your safe harbor calculations, please contact this office as soon as possible.

CAUTION: Some states' de minimis sums, safe harbor estimate regulations, and estimate payment due dates vary from those for federal estimates.  Please contact this office for specific state safe harbor requirements.

April 15 - Last Day to Establish a Keogh Account for 2024

If you are self-employed, the deadline to open a Keogh Retirement Account for 2024 is April 15, 2025.  The deadline might be extended until October 15, 2025, with a legitimate six-month extension of time to submit your individual 2024 tax return.

April 15 - Last Day to Make Contributions

Last day to contribute to Traditional and Roth IRAs for tax year 2024.

Weekends & Holidays:

If a due date occurs on a Saturday, Sunday, or legal holiday, the due date is automatically extended to the next business day that is not itself a legal holiday.

Disaster Area Extensions

Please keep in mind that when a geographic region is classified as a disaster area, deadlines will be extended.  For further information on whether an area has been declared as a disaster area and the filing extension dates, please visit the following websites:

FEMA:    https://www.fema.gov/disaster/declarations

IRS:  https://www.irs.gov/newsroom/tax-relief-in-disaster-situations

April 2025 Business Due Dates

April 15 - C-Corporations

File a 2024 calendar-year income tax return (Form 1120) and pay any taxes owed.  If you require an automatic 6-month extension to submit the return, complete Form 7004, Application for Automatic Extension of Time to submit Certain Business Income Tax, Information, and Other Returns, and deposit the amount you believe you owe.  Filing this extension protects you from late filing penalties but not late payment penalties, so estimate your debt and deposit it according to the instructions on Form 7004.

April 15 - Social Security, Medicare and Withheld Income Tax

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

April 15 - Non-Payroll Withholding

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

April 15 - C-Corporations

A calendar year corporation's first payment of its projected tax for 2025 is payable.

April 15 - Fiduciary Returns

Last day to submit a 2024 calendar year fiduciary return (Form 1041, U.S. Income Tax Return of Estates and Trusts) or request an extension.

April 30 - Social Security, Medicare and Withheld Income Tax

Fill out Form 941 for the first quarter of 2025.  Deposit or pay any undeposited tax according to the accuracy of deposit guidelines.  If your tax due is less than $2,500, you may pay it in full by filing a timely return.  If you deposited the tax for the quarter in whole and on time, you have until May 12 to submit your return.

April 30 - Federal Unemployment Tax

If the tax payable is greater than $500, deposit it till March.

Weekends & Holidays:

If a due date occurs on a Saturday, Sunday, or legal holiday, the due date is automatically extended to the next business day that is not itself a legal holiday.

Disaster Area Extensions

Please keep in mind that when a geographic region is classified as a disaster area, deadlines will be extended.  For further information on whether an area has been declared as a disaster area and the filing extension dates, please visit the following websites:

FEMA:

https://www.fema.gov/disaster/declarations

IRS:

https://www.irs.gov/newsroom/tax-relief-in-disaster-situations