I hope you enjoyed your Labor Day break. Now that summer is effectively and officially coming to an end this month, it's also a good time to look at some tax tasks.
Taking care of tax business in September can help you avoid a costly tax fall as autumn arrives.
OK, bad seasonal quasi-pun. Sorry. Accept my apology and these four September 2023 tax moves.
1. Pay your third quarter 2023 estimated tax. Many who've already filed their annual tax return still have other taxes to take care of this month. Yes, I'm talking about estimated taxes, which must be made for income that's not subject to payroll withholding. The third estimated tax payment for the 2023 tax year is due on Friday, Sept. 15.
You can make estimated tax payments electronically or, if you're old-school, use the third Form 1040-ES voucher and snail mail it. Your mailed payment is considered on time as long as the envelope bears a Sept. 15, 2022, U.S. Postal Service postmark.
2. File your business return. The deadline for certain businesses that got a six-month filing extension for their 2022 tax returns also is Sept. 15.
Calendar-year partnerships and S corps that miss filing their Forms 1065 or 1120-S, respectively, could owe the U.S. Treasury more, possibly a lot more.
The penalty for partnership filers is $220 for each month the returns are late, up to a maximum of 12 months, multiplied by the number of partners or shareholders in the company.
The same $220 per month per shareholder penalty also applies to S corps that miss the due date. But wait, there's more. The business also will be charged 5 percent of the unpaid tax for each month the form is late, up to a maximum of 25 percent of the unpaid tax.
3. Double check your tax deadlines. Some taxpayers don't have to meet this month's extended filing deadlines. The reason, however, is not a pleasant one.
They get more time to comply with a variety of tax tasks because they live or have businesses in areas that were hard hit by major disasters.
The most recent deadly outburst was Hurricane Idalia. Before that, parts of Hawai'i were devastated by wildfires. And earlier in the year, severe storms, tornadoes, and flooding prompted Federal Emergency Management Agency (FEMA) declarations and Internal Revenue Service relief in several states.
The new deadlines and the areas where they apply are —
- Oct. 16 for tornadoes in Alabama, Georgia, and Mississippi, and storms in California;
- Oct. 31 for storms and flooding in Alaska and Illinois;
- Nov. 15 for floods in Vermont; and
- Feb. 15, 2024, for Idalia damage in Florida; and fires on Hawai'i's Big Island and Maui.
4. Review, and possibly adjust, your withholding. There is nothing worse than a big surprise tax bill. You can avoid being in that unwanted situation at filing time by reviewing, and adjusting if needed, your withholding now.
September is good time to do this, especially if you find you need to have more withheld each pay period. The added amount will be spread over the four remaining months of the year so the payday bite shouldn't be too severe.
On the other hand, if you're having too much withheld, adjusting your withholding will get you the recalculated tax money now, instead of having to wait (and possibly wait and wait) next filing season for the IRS to send you your refund. The added pay also could come in handy at holiday shopping time, which will be here before you know it.
And if you're self-employed, make sure you pay the correct amount of estimated taxes, starting with the amount due, as noted in the first September tax move, on the 15th of this month.
More tax monthly moves: If the changing of seasons and, fingers crossed, cooler weather gives you some added tax energy, you can find more September Tax Moves over in the ol' blog's right column.
That list is, as usual, just beneath the digital clock counting down to the aforementioned October extended filing deadline. Don't worry. I'll nag remind you of the due date in next month's moves to make post.
For now, though, there's plenty to take care of this September.
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